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Rents fall at top end of London market

Wednesday, 25 January 2012 12:14 PM

Some rare good news for prime central London tenants as property consultant Cluttons reports that rents fell slightly at the end of last year and are set to fall more in the Spring.

The 0.4 per cent fall in the fourth quarter of 2011 was small by comparison with an increase of almost nine per cent over the previous 12 months to take rents to 10.3 per cent above the peak of the market at the start of 2008.

However, Cluttons says lack of promotions and nervousness about job prospects in the City has led to increased price sensitivity from tenants and greater flexibility from landlords looking to keep good tenants and minimise voids.

Meanwhile reduced budgets and cuts to corporate housing allowances have led to some tenants looking to cheaper locations which are still within striking distance of the City, such as Islington.

Lynn Hilton, partner for residential lettings at Cluttons, said: "The remarkable growth in rental values seen last year could not continue and this correction in values will bring the market back to a more stable level.

"While there is considerable economic uncertainty, we don't anticipate a drastic reduction in rents as demand is still high, but tenants will undoubtedly welcome increased choice and negotiating power."

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