Lettings Market

New research shows that rents in London are now stabilising, following the fall in 2008 caused by an over-supply of rental stock to the market.

An increase in 'accidental landlords' converting their sales properties into lettings led to the market becoming saturated last year, forcing rents down. According to records rents for London houses fell by 17.03 per cent between April and September 2008 and flats by 10.84 per cent over the same period.

However, latest statistic indicate things are on the up. As sales started to improve in the first half of 2009, there has been a positive knock-on effect for lettings as rental prices begin to stabilise. Although rents still declined between October 2008 and June 2009 (by ten per cent for flats and 12 per cent for houses), the decrease is less defined than the fall between April and September 2008. And in some areas rental prices have started to go up.

Rental stock levels have decreased by almost ten per cent since January 2009. As supply levels decrease, demand for rental properties rises, and therefore rents are starting to stabilise. Whilst there is still a good supply of properties to rent, the demand is also there, so properties are coming on and off the market at roughly the same time. All indications currently show that the rental prices will recover in the coming months as the availability of rental properties and demand from Tenants comes back into balance.