London rents to continue rising in 2013

Rental price growth in the capital will continue to outstrip the national average next year despite the fact that a rising number of tenants are falling behind with rent payments due to affordability constraints.

A Rightmove report, released earlier this week, found that more landlords are expected to introduce a rent freeze in 2013, as rents increasingly look like they may have peaked.

But some property market experts believe that the huge gulf between supply and demand in the capital will only act to push rental values even higher.

Peter Rollings, CEO of Marsh & Parsons, said: “The more buoyant sub £1,000 a week market has seen a strong performance, with annual rises of up to 15% in many areas where would-be buyers are forced into the rental market by a historically low supply of both mortgage finance and property to purchase.

“Based on current trends, Marsh & Parsons expect rents in this segment of the market to rise by a further 8-10 per cent in 2013.”

Virginia Ewart-James, head of residential lettings at EA Shaw, a central London specialist based in Covent Garden, said: “Generally rents will continue to increase with a rate of 5% estimated during 2013. This follows an impressive increase of 4% in rent up to November 2012 over the previous year.

“There is still good demand for rental properties which will continue to strengthen as London grows further as a hub and a popular place to live and work. London is still seen to have the best education in the world and remains an attractive option for studying. Students in particularly, are bringing in good budgets; often paying six months in advance, and proving to be valuable and lucrative tenants within residential lettings.”

Source: PropertyInvestorToday

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