Prime property rental prices in London are predicted to rise throughout January which will kickstart a recovery of top end rents in 2016. The pace of top tier rents slowed down somewhat throughout 2015, and significantly weaker activity created a slightly difficult climate for rental growth. However, a report released from Marsh & Pearsons forecasts a resurgence which will see rents rise by 5% over the next 12 months, a considerable uplift from the 1.9% increase last year.
A great deal of this growth is expected to occur in the early stages of the year, with January predicted to be the strongest month outside of the summer for lettings activity. This is due to the fact that the last three years have seen an average monthly boost of 34% in lettings exchanges in January. The New Year presents an ideal opportunity for people to make fresh starts and relocate to new properties.
When January hits, it is common for households to carry on where they left off before the holiday period regarding big decisions such as down and upsizing, starting a new job in a new area and relocating overseas, which all have a significant impact on the private lettings market.
The activity in the early stages of the year will contribute to a more sustained rent growth throughout the rest of 2016. There are several brackets of the rental sector that have room to grow, such as popular hot spot Queen’s Park. Located between Brent and the City of Westminster, the area boasts a style and atmosphere similar to Kensington with the added bonus of greater affordability.
The length of tenancies in London have also increased by 18% in the last twelve months. People want greater stability due to the reduction of available properties on the market and are entering into longer tenancies as a result. As 2015 saw these extended tenancies become more popular there was a slight reduction in turnover, but with many tenancies due for renewal in 2016 the combination of price adjustments and new rental agreements will aid the growth of the market. All of this spells great news for landlords looking to secure maximum returns on their property investment in Redbridge, the City of Westminster, and all other areas of the capital.