Tenant affordability and an oversupply of rental properties across Central London are contributing to an ongoing correction in rents, according to property consultants Cluttons.
Landlords who wish to let their properties now need to be flexible on rent and consider a reduction of 15 to 20% off current asking prices to avoid the undesirable position of having an unlet property as Christmas and the New Year, the firm says.
Increasingly, price-conscious tenants, many of whom can no longer rely on the cushion of a corporate let, are renegotiating hard on new agreements or at renewal and are using the greater choice of rental property as a bargaining tool.
Affordability is now central to the performance of London’s rental market. Landlords cannot achieve the rents they were getting 12 months ago and must now be far more realistic with rent reductions of around 15 to 20% in order to secure a let, said Lynn Hilton, partner for residential lettings at Cluttons.
Despite a small turn around in rents during the third quarter, our evidence shows that rents have begun retreating once more, highlighting the need for landlords to be realistic in their approach and expectations. Sensible landlords need to accept these reductions to minimise void periods. Greater choice across Central London is no doubt adding to tenants bargaining power, she added.