Since January 2016 stock levels in Prime Central London have risen sharply from 7,802 (Jan) to 13,723 in September (source Lonres). September’s stock level currently stands at 12,609 which is a 75% increase over the same month last year. This is the predominant factor impacting prices in the London lettings market.
Whilst stock levels have soared, underlying activity (number of Lets per month) have seen only a gradual increase in 2016 from 2,000 in Jan. to 3,621 to date in September. In any market, an increase in supply of this magnitude coupled to static demand is going to have an impact on prices, and our market is not immune to these fundamental economic forces.
As a result, rental values in Prime Central London have fallen by 4.1% in the year to August and in Chelsea specifically by 7.6% over the same period (see Fig 1). Having said that, we may be beginning to experience the “upside” of Brexit, from a Lettings perspective. August saw a jump in transaction levels of 42% from the month before, and there is an increasingly convincing argument that this pervasive uncertainty will push more and more London residents present and future into renting as a safer option, at least until the political landscape is clearer.
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