This article looks at rising asking rents in London, which rose in the last three months of 2017, a 1.2% increase on the same time the previous year. This is due to rental demand and fewer properties to let.
Asking rents in London started to climb again in the last three months of 2017, a 1.2% increase on the same time the previous year.
In the capital, especially in prime London, asking rent increases have stalled in recent years, but, partly as a result of fewer properties available for let, asking rents are now rising again.
Rental stock soared around April 2016 as buy-to-let investors scrambled to secure property prior to the extra stamp duty surcharge on second homes kicking in.
Meanwhile, in April 2017, another tax change was introduced which is having a key impact on buy-to-let investment decisions. The tax relief residential landlords can claim for finance costs is gradually being restricted to the basic rate of Income Tax. This measure is being phased in, so it will have a greater impact on landlords in a few years' time.
But this measure is already having an effect, as it is encouraging some London landlords to sell off some of their portfolio. This reduces the amount of rental stock available. But with demand for rental properties in London still strong, this has helped to push up asking rents.
According to figures published in the Evening Standard, the top five areas where rental demand is strongest are Kennington, Camberwell, Mitcham, West Wickham, and West Norwood.
Rental demand in prime London areas, including Knightsbridge and Kensington, remains strong, while the sales market is showing signs of movement, partly as a result of vendors lowering their sales expectations.
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