by Gary Whittaker
Prime London rents are forecast to rise five per cent over the next year, according to real estate agents Marsh & Parsons.
This would be a significantly higher increase than the 1.9 per cent lift seen in 2015. With January being the start of prime property lettings season in the capital, the five per cent increase from the outlook report should be heavily felt early in the year.
The average increase in the number of lettings in the December to January period has stood at 34 per cent over the past three years.
Director of lettings at Marsh & Parsons, Patrick Littlemore, commented: This initial activity will feed into stronger and more sustained rent growth throughout 2016 as a whole. He also pointed to Queens Park as an area in which he expects to see increased letting interest.
While prime lettings are anticipated to see significant growth, Marsh & Parsons expects the highest tiers of the market – properties listed at over 750 per week – to experience little to no uptick. As the lower price brackets of the private rental sector have the most room for expansion, this is unlikely to surprise those in the sector.
Furthermore, the firms report suggests there will be an increase in renters signing two year tenancy agreements, as renters look for increased stability in their living situations. This is a continuing trend, as the average length of rental property agreements in prime London has grown 18 per cent from 2014 to 2015. Over half of these longer agreements contain a variation of some rent increase, easing many concerns of lost profit for property owners.
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