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Rents in London stabilising after sharp 2008 falls

Wednesday 19th August 2009

The price tenants are paying to rent a home in London is levelling out, according to research conducted by Winkworth’s estate agents, after falling in 2008 as homeowners failed to sell and rented out homes instead in the falling markets.

In 2008, as more and more sales properties were converted into lettings, the lettings market became saturated, and rents started to fall.

Winkworth's property price guides, including figures compiled from its 56 London offices, show that rents fell dramatically after April 2008. Figures show that rents for houses in London fell by 17.03 per cent between April and September 2008 and flats by 10.84 per cent during the same period.

Winkworth's latest property price guide, for summer 2009, shows a brighter outlook for rents. As sales started to improve in 2009, so lettings appear to be stabilising.
Although rents fell by 10 per cent (flats) and 12 per cent (houses) between October 2008 and June 2009, the decrease is less defined than the first fall of April 2008 - September 2008.

In some areas, such as Harringay, Edgware and Clerkenwell, the rents for some properties have increased, said Winkworth's. The figures also show that houses have experienced a more marked decrease in price fall compared to flats, thanks to falling supply levels.

As properties are starting to sell again, there was no longer the quantity of sales conversions that existed in 2008. Figures taken from Winkworth's website reveal that rental stock levels (flats and houses) have decreased by almost 10 per cent since January this year. As supply levels fall, demand for rental properties rises, and therefore rents are starting to stabilise.

Georgina Parker, lettings manager from Winkworth’s in Clerkenwell said: “This is historically a busier time of year, and demand has therefore increased. We still have plenty of rental stock available, but the demand is also there so properties are coming on and going off the market at about the same rate.”

“Looking to the future, I expect rents to recover in the following months as the availability of rental properties and demand from tenants come back into balance.’

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