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June 29, 2012 - PRLog -- The latest Prime Central London Rental Index shows an increase in the rents for first time ever in six months. This has finally come up after total falls of 0.8% in the six months to March. It implies 1.2% rise in rents over the past year. Investors should see this as an opportunity as gradually though, but the rents are rising.

New property instructions went up by 56%, and new tenancy starts up by 40%, in the three months to April against the same period in 2011. But new tenant registrations were up by merely 5% and property viewings up by 15%.

What verifies this gap is the ratio of new applicants to new instructions, which last year was 4.3 and this year, to date, stands at just 2.9.

Bailey opines, ‘This can be explained by the continued lull in the City employment market and restricted budgets, both individual and corporate. It can also be attributed to the continued strength of the sales market in prime central London, which is encouraging some to buy rather than rent’.

Despite upward trend in prime rents, landlords should not expect a rapid rise in rents in the next few months, since the demand is far lesser than the surplus in supply. ‘Our view remains that we will see a modest growth in rents of 1% in 2012, before a more sustained recovery in 2013,’ added Bailey.

It is interesting that there are differences in performance within the prime market itself. “Belgravia for example saw prices rise by 1.2% in April while Hyde Park saw a 0.9% fall”, said Liam. While some two or three bedroom houses in the price range of £1,700 to £1,800 per week in Knightsbridge remained unsuccessful in attracting attention, some developments in the area are proving quite the contradictory, thereby achieving good rents.

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