Central London rents dropMonday, 12 March 2012 11:25
The Central London employment market is having negative effects on rental prices in the capital city.
According to Knight Frank the average rental prices in prime London locations dropped by 0.2 per cent in February.
This is the third month to experience a downturn in prices and rents are now sitting at the same level as in June 2011.
This is a predominant fall considering the growth seen mid 2011 when rents started to rise clocking up a whopping 26.9 per cent increase at the fourth quarter.
“The rapid rebound in rental levels between mid-2009 and late-2011…was driven by a revival of the central London economy, following the ravages of the credit crunch and global recession,” Knight Frank's Head of Residential Research Liam Bailey said.
“Further growth from here was dependent on continued demand-side expansion.
“But with job losses in the city beginning in Q3 (the third quarter) last year, demand began to fall back a little in October.”
While this is a grim outlook tenant registration numbers did rise by 23 per cent in the three months to February.
If supply continues to grow at a slow rate landlords will have the ability to push prices back up as renters struggle to gain accommodation.
At the same time the lower-priced properties between £500 and £1, 500 per week in rent are experiencing growth as many people attempt to reduce household spending.
If corporate employment increases so will rental demand and prices.