London lettings hit by surge in supply as tenant numbers fall back

High end lettings agency Knight Frank says the proportion of properties listed for rent in prime London residential markets in October was at its highest level since January 2017 - refuting claims that landlords were moving out in great numbers. 

“While some landlords listed their property for sale due to a series of tax changes, a number have returned to the lettings market after their price expectations were not met in the sales market” explains the agency in its latest market snapshot.

Knight Frank continues by saying that as supply has risen, the ratio of new prospective tenants to new lettings listings declined to 4.7 in October. But the agency insists that despite the decline, new demand remains relatively high versus new supply by historic standards, which suggests that positive annual rental value growth will be sustained. 

Despite this backdrop, rents grew 1.4 per cent in the year to November, which was the highest rate in more than three years. Meanwhile, rental value declines in prime outer London are moderating, the agency says. 

Specifically in Prime Central London, November was stronger for properties rented at less than £1,000 per week than for units above that figure. 

“As rental values strengthen, it reflects how corporate accommodation budgets have been curbed in recent years in response to economic and political uncertainty” admits Knight Frank.