London alert - second agency warns of sharp drop in rents

Another agent reports huge surge in supply of London properties to let

Yesterday Chestertons reported a large rise in the supply of homes to let - and now rival agency Knight Frank has followed suit with similar data.

It says that throughout April and May the number of instructions to let was consistently ahead of the same period last year as owners hedged their bets during the pandemic and opted to let rather than sell.

Now the agency’s latest figures show that the number of viewings in the week ending June 27 was 35 per cent higher than the five-year average. The week before, the increase was 47 per cent.

The number of new prospective tenants registering was more than a third higher than the five-year average during every week of June

But Knight Frank adds that while supply is catching up with demand in the London sales market, the trend is reversed in the rental market, which has put downwards pressure on rental values. 

The annual decline in average rental values in prime central London increased to 4.6 per cent in June, after a monthly fall of 0.8 per cent.

As demand increases, supply has started to become more subdued, it warns. 

In the week ending June 27, the number of valuations appraisals for prospective landlords was 24 per cent below the five-year average - all of which means rental value declines should begin to bottom out over the next several months.