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.”