Rentman: Prime London rents 'to grow 2.5% this year'
Mon 26 Jan 2015
Prime London rents 'to grow 2.5% this year' by Gary Whittaker
Prime London rents will rise 2.5 per cent over the next 12 months, according to the latest forecast from Savills.
The organisation has predicted this level of growth for both the capital itself and its commuter belt. Over the next
five years, it expects an increase of 17.1 per cent and 15.9 per cent to occur in these regions respectively.
"Looking forward, the strengthening London economy and the continued expansion of sectors such as technology
and telecommunications will underpin demand for prime rental property both in London and the wider commuter
zone, though demand from the financial and business services sector is forecast to remain relatively subdued,"
The organisation said a more subdued sales market in the run-up to May's general election could see a greater
number of houses being brought to the rental sector in the early part of the year and this could weigh on rent
growth. It also pointed to increased housing stock in the commuter belt as something that may limit expansion.
Furthermore, Savills highlighted Labour's proposed mansion tax on properties worth 2 million or more as
something that may hit growth should the party come to power.
In terms of 2014, the organisation revealed prime London rents increased 1.8 per cent, with the strongest growth
seen in the central and east of City markets. In the commuter belt, a rise of 2.7 per cent was recorded. Towns
such as Guildford, Harpenden, Tunbridge Wells and Winchester were all highlighted as performing particularly
The strongest results were delivered by smaller properties last year, with Savills finding prime one-bedroom and
two-bedroom properties saw rents rise by 3.1 per cent and 2.7 per cent respectively.
Its research follows on from a Marsh & Parsons study that revealed prime London property prices increased by
260 per day last year.