Prime London rents fall further as short lets make supply glut worse

There’s more bad news for landlords and investors looking at prime London properties according to a market snapshot from Knight Frank.

It says in prime central London, average rents declined 9.1 per cent in the year to late October, compared to 7.6 per cent in prime outer London.

Supply is up due to the addition of short-term lettings properties coming to the market.

In addition, more owners have decided to let rather than sell due to uncertainty surrounding the trajectory of prices as Covid-19 hits the economy. However, this trend has been less marked in more suburban areas with outdoor space, where prices have been more robust.

“If you exclude south-west London, supply levels are currently 20 per cent above where we would normally expect them to be at this time of year. That has come down from a figure of around 40 per cent earlier this year. Rents are still falling and the properties that are letting are where the price has been reduced” explains Gary Hall, head of lettings at Knight Frank.

The trends have been exacerbated by a reduction in the numbers of international students and tourists - the latter has prompted many owners of Airbnb and other short-let investment properties to switch their letting over to the longer term rental market.

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