Benham & Reeves Residential Lettings says it is encouraging its London landlords to avoid rent rises and instead focus on retaining tenants over the long term.
This is because of an over-supply of property to let and ongoing volatility in the wider economy and in the fiscal landscape facing landlords with tax rises on the horizon.
Consistent with other market predictions, Benham & Reeves Lettings says the largest rental growth is set to be outside of central London.
Suburban locations underpinned by a strong local market and improving transport links have seen the biggest rent rises over the past year, and BRRL says of particular note is Colindale in far north London which saw rental rises of 4.7 per cent.
However, it says some prime central London locations may have turned a corner. In W1, for instance, the new Fitzroy Place just north of Oxford Street in central London helped push rental price growth in the £700 to £1,200 per week bracket. The agency says this same effect is anticipated in Wapping once units in the London Dock development begin to hit the market at the end of this month.
BRRL says lease renewals are up with Knightsbridge reporting an 85 per cent renewal rate. With the average length of a tenancy in 2016 at 17 months, this far outstrips the previous average of less than a year.
“So while landlords are not able to achieve higher rents, their overall income is higher thanks to fewer and shorter void periods” comments Marc von Grundherr, BRRL lettings director.
“Rising taxes and stamp duty rates have taken their toll and it’s been hard to offer many crumbs of comfort to our landlords. These latest figures, however, demonstrate that for those who are able to ride out the tough times, the market will eventually turn back in their favour” he adds.
“We don’t want to be too optimistic just yet as things are still undeniably difficult for many amateur property investors but nothing could be as bad as 2016.”