Carter Jonas Prime Central London Residential Lettings Report - Winter 2011

Despite the growing economic gloom, the Prime Central London residential market has continued to shine in 2011 and our forecast indicates another prosperous year ahead.

In contrast, the lettings market has witnessed a more subdued latter half of 2011 and activity is expected to remain restrained over the Christmas period. However, this downturn is expected to be relatively short lived and activity is forecast to improve moving into Spring 2012.

Lettings
The first half of 2011 proved healthy for the Central London lettings market as rents increased by 12 per cent from their mid-2010 levels. However, the market has remained sluggish since the summer and the number of enquiries is down 19 per cent compared to August.

The main cause of the slowdown is thought to be a mismatch between landlords’ expectations and tenants’ budgets. The result is likely to be an increase in supply in the early part of 2012 which will restrain or lower rents by 5-7 per cent for the first six months. But rents will still be significantly higher than their mid-2010 levels following sharp rises from 2009.

Because of the major increases since 2009, many tenants are choosing to stay put and renegotiate rents down to below headline rates. Therefore, the supply of good quality properties remains restrained, although likely to increase during early 2012.

The downturn in lettings is forecast to be relatively short-lived and activity levels are expected to recover by the spring of 2012. Demand will rise thanks to European tenants attracted by the UK’s comparative stability as well as the flexibility of short lets. The London Olympics will also provide a significant boost to demand in 2012, with rents expected to rise by up to 5 per cent from the middle of year.

Catherine PenmanMRICS

Head of Research

Catherine is Head of Research at Carter Jonas and is based in London and Northampton. The primary focus of her team is to produce published reports focusing on the firm’s commercial, rural and res...

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Catherine is Head of Research at Carter Jonas and is based in London and Northampton. The primary focus of her team is to produce published reports focusing on the firm’s commercial, rural and residential divisions. In addition, her time is currently directed towards the more specialist areas of the firm including the technology and energy sectors. Catherine has two young daughters and is a farmer’s daughter from the Welsh borders. Her long-term ambition is to own a small farm and continue to breed her grandfather’s flock of pedigree Suffolk sheep.

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