Prime Central London: rental declines are slowing

The pace of decreasing rental values in Prime Central London (PCL) has slowed, according to the latest data from Knight Frank.

Average rental growth across all price brackets was recorded at between 0% and -0.5% during May. This contrasts with growth figures ranging from 0.1% to -3.3% just six months ago. 

The fledgling recovery is best exemplified by figures for the £1,000-£1,500 per week price bracket. Last month, average rental growth was -0.5%, compared to -7.7% in May 2016.

At the lowest price points, the more positive figures are down to continued strong demand from young professionals, Knight Frank says.

Meanwhile, at the very top end of the market rental declines have slowed due to uncertainty surrounding the PCL sales market.

The high-end market in London has been experiencing a positive period for tenant demand of late. 

The number of new tenants registering with Knight Frank increased by 13% between January and May when compared with the same period last year.

On top of this, agreed tenancies have increased by 26% and viewings by 24% during the same timeframe. 

The high-end agency reports that between January and May this year, the number of new rental properties coming to market in PCL has fallen by 6% when compared to the same period in 2016.

This is a reverse in the trend of relatively high stock levels that has been experienced since 2015. 

A slowdown in new stock entering the market has heightened but not been solely caused by controversial tax changes introduced in April.

Knight Frank predicts that average rental declines in PCL will continue to slow throughout the remainder of 2017.