Large glut of available rental stock in prime London warns Knight Frank

There has been a 25 per cent rise in the number of prime central London tenancies according to Knight Frank - but there's a huge glut of available rental stock.

Comparing the three months to the end of September this year with the same period of 2015, the agency nonetheless admits that thanks to "markedly higher stock levels" rents have dropped by 4.9 per cent.

The number of new lettings properties coming onto the market rose 29 per cent over the same three-month period and there was a 27 per cent year-on-year increase between January and September.

Demand has not been rising at the same pace "which underlines the extent to which prime central London is a tenants’ market" says the agency.

Higher stock levels are the result of uncertainty over the short-term prospects for price growth in the sales market, which has led more vendors to let their properties.

The agency warns landlords that because of the glut of available properties, refurbishment is essential to prevent voids. 

Demand in the super-prime market (£5,000- plus per week) remained strong in October due to higher levels of stamp duty in the sales market. Similarly, demand below about £1,500 per week also remained robust

The performance of what Knight Frank calls "the middle segment", which is typically driven by senior executives, remains patchier. This is where the steepest rental value declines have been registered.