Prime rental deals surge in the Home Counties

Knight Frank records a 23% rise in the number of tenancies agreed in Q1, but values are still on the slide...

Prime rental values in the Home Counties took another hit in Q1, falling by 2.3% and moving the annual decline to 3.9%, although there’s much optimism around over increasing activity levels.

Knight Frank attributes the price slowdown to a glut of stock – some of which has come over from the struggling sales market; the lettings teams took on 33% more instructions than in Q1 2016, while the number of market appraisals was 39% higher.

Demand is also on the up, however, and the firm registered 15% more applicants in Q1 compared with the same period last year, translating into a 23% rise in the number tenancies agreed. Nearly two-thirds (61%) of new tenants in Q1 were from the UK, with Americans making up the next biggest group.

Most of the demand seems to be in the sub £2,000 per month range, with higher-priced stock taking longer to shift and tenants able to negotiate hard. Corporate enquiries were up 17% on 2016 levels, said the firm, and are expected to rise further as we head towards the start of the school year.

Jemma Scott, a partner in Knight Frank’s Home Counties lettings team: “The figures very much reflect the feedback that we have been getting and the general sentiment within the market. After a challenging summer last year we saw a surge in rental deal volumes at the beginning of 2017 which, coupled with the heightened level of enquiries from prospective tenants, means we head into the traditionally busy spring/summer market with great optimism.”