Central London’s prime property rental market was able to remain buoyant in the first quarter of 2019, despite the uncertainty surrounding Brexit, according to a report by London Central Portfolio (LCP), an investment advisory firm.
LCP’s Prime Central London Lettings report estimates that the number of rents has increased by 0.2 per cent in Q1 of this year, while cases of re-letting grew 0.1 per cent in the same period.
Length of tenancies grows
LCP found that, despite rents growing at just 0.1 per cent in Q1 this year, the length of tenancies in prime Central London rental markets has increased significantly in the last decade. In 2009, the average prime property tenancy in Central London lasted 350 days and by 2018, this number rose to 450 days.
The report also claimed that the single largest group of prime Central London tenants were EU citizens, who made up 41.7 per cent of all tenants in that sector.
A significant proportion of landlords in the sector were estimated to be foreign investors, with as many as 68 per cent of all landlords in Central London’s prime real estate market represented by overseas investors from Asia.
Earlier this year, as many as 70 per cent of prime Central London tenants were Millennials, otherwise known as the generation of Britons born between the 1970s and the 1990s, according to LCP.
Mayfair and Knightsbridge home to highest rents
The highest prime Central London rents were found in Mayfair and Knightsbridge – the average rent there was £60.49 per square foot, according to LCP.
Naomi Heaton, CEO of LCP, commented on the report: “As a rule, rents are correlated to the cost of purchasing a property. With low borrowing costs and prices falling, we would not expect much upward movement.”
Ms Heaton added: “Landlords remain concerned about Brexit, putting tenants in a strong negotiating position.”
The report identified a trend towards downsizing by tenants, when rental contracts ended. “The continuing trend is for renting smaller units as budget conscious tenants prioritise prime locations over size…clever space optimisation and stylish interiors are becoming ever-more demanded.”, Ms Heaton concluded.