Prime properties in central London enjoy renewed rent rise

According to new research, rents in prime central London locations are starting to increase again

This comes after months of price decline within the most prestigious areas of the capital and provides plenty of positive news for landlords.

Top addresses such as Knightsbridge, Belgravia and Mayfair rose by four per cent or more during the final quarter of last year, uplifted by a demand from foreign buyers.

Persistent market strength

The findings come from research carried out by lettings firm Benham and Reeves which also suggest a persistently strong market was present elsewhere in inner suburbs of London, despite more modest rental growth overall.

The majority of inner suburbs have experienced stabilising rents or seen modest growth but the market in parts of North London, including Hampstead and Highgate, has cooled a little.

Locations that rely more heavily on the domestic market, like Chelsea and South Kensington, have also not fared quite as well.
 

The firm highlighted that there are fewer homes being built in these areas. Instead, potential tenants are being drawn to new and less expensive developments in East London.

Reports show that Hackney and Greenwich were the two London boroughs that saw highest capital growth over the course of 2014 as brand new developments entered onto the market and large rent increases were put in place to reflect growing demand.

A reliable market

As Marc von Grundherr, Lettings Director at Benham and Reeves Residential Lettings explained, prime central London is still seen as a “blue chip” investment – and for good reason.

Despite slowed capital growth, popularity is undiminished; particularly from the point of view of tenants.

He pointed out how concerns were raised towards the end of last year, with “bearish” headlines hitting property market news, but landlords who kept their nerve during this time are starting to see the rewards.

With rising prices reflecting a high demand, investors can feel more assured of rental demand in both prime central London areas as well as the now ever-popular eastern locations.

For more news about the Buy to Let market in the Capital please see another article on London properties from Steve.

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