Rental prices end the year 2% down
10 January 2010
There's no doubt that 2009 has been a difficult year for both the housing sector and the economy as whole. Against this backdrop, London's rental sector has held up remarkably well, with average rental prices ending the year only 2% below their starting point.

What's more encouraging still is whilst some ground was lost in the first half of 2009, the story has been very different since the summer. Rents in London have now risen for fourmonths in a row, bucking both the seasonal and national trend in December.

Nigel Lewis fromfindaproperty.com estimates that the number of properties on themarket in December was 1.7% lower than the previousmonth. "Supply continues to fall in the Capital, taking stock to the lowest level since January 2009", he explained.

The combination of tightening of supply and increased tenant demand can only be good news for the London rental market.

EveWebster, Area Letting Manager, spent some time comparing like for like activity across the offices. "In the week before Christmas we registered more than double the number of tenants compared with the same period last year. The offices as a whole, from Camden to Wandsworth, are much busier than they were a year ago."

The outlook for the rentalmarket is therefore encouraging. The healthy level of demand for rental property is likely to be sustained as a difficult mortgage market and high deposit requirements limit the opportunities for first-time buyers to gain a foothold on the housing ladder. An increase in the base rate, which some economists view as inevitable, would make matters more difficult still for first time buyers.

Neil Nichols, Finance Director, believes that these benign conditions will continue into the next year. "My view is that the rentalmarket will be characterised in the medium term by robust demand and limited supply resulting in steady, though probably not dramatic, rental price growth in 2010."

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