Rents fell by 0.8% in prime central London in July, taking the annual decline to minus 1.1%, as lettings volumes improved – making it a record month for Knight Frank’s lettings team.
Liam Bailey, head of residential research at Knight Frank, said: “We have noted how rents have been edging down in prime central London since October last year.
“The rate of this decline has been fairly sedate, and while July’s 0.8% fall marks the biggest decline since our monthly records began in April 2011, rents in prime central London are still 25% higher than the trough of the market in the second quarter of 2009.
“There is no doubt that the prime rental market has been affected by the downturn in financial sector employment caused by the slowing UK economy and the eurozone crisis over the last year. Recent figures from the Centre for Economics and Business Research suggested that the number of finance jobs in the City of London had fallen to 255,000 this year, down from 354,000 in 2007.
“Despite this unsettled background, July saw a noticeable upturn in the lettings market in volume terms, with 30% more tenancies being agreed compared to the same month in 2011.”
Tim Hyatt, head of Knight Frank Residential Lettings, said: “The data shows a more negative picture than our results. Savvy tenants have seen the Olympic period as a good time to look for property as getting around and normal daily life has not been as problematic as predicted.
“Knight Frank’s residential lettings team have recorded extraordinary results for July, making it the best month on record for us.
“This doesn’t take into account the income generated by the Olympic lets achieved, which have been far less than the hype predicted.”
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