Prime property rents in Home Counties market decline
Prime property rents in the sought after Home Counties region of England fell by 0.8% in 2016 following a 1.6% decline in the final quarter of the year.
But activity levels picked up towards the end of the year with tenancies agreed 12% higher between October and December than in the same period in 2015 and 16% higher than the previous quarter.
The latest rental index from Knight Frank suggests that the marginal decline over the course of the year came as stock levels at the top end of the market continued to edge upwards, a trend which has been fuelled by greater uncertainty in the sales market following a series of tax changes.
Knight Frank was instructed to let 39% more properties in between October and December compared with the previous year, and the number of market appraisals, regarded as a good indicator of future stock levels, was up by 45%.
As a result, the report says it remains a tenants’ market, particularly in higher price brackets, with landlords having to be flexible with regards to asking rents in order to remain competitive and keep void periods to a minimum.
The number of viewings rose 17% over the same time compared with 2015, while the volume of new prospective tenants increased by 28%.
Agents noted that much of this demand was focused on the sub-£4,000 per month price bracket with such properties often letting faster than those in higher price brackets.
This section of the market was also boosted by an increase in corporate enquiries from company executives moving to the Home Counties for work over the course of the quarter. Accordingly, some 77% of corporate enquiries in December, for example, had budgets of between £1,000 and £4,000 per month.
Agents pointed out that there has also been a pickup in interest for lets of £10,000 and above in the super prime rental market.