Brexit impact on London lettings not as bad as expected – at least yet…
The impact of Britain’s decision to leave the European Union has not hit the central London lettings sector as much as expected – at least not yet.
Data from London Central Portfolio – an investment consultancy that provides authoritative market snapshots of the sales and lettings sectors in the capital – says the first quarter of 2019 has seen rents increase slightly for both renewals and re-lets by 0.2 and 0.1 per cent respectively.
Annually, renewals are up 0.4 per cent.
“As a rule, rents are correlated to the cost of purchasing a property. With continuing low borrowing costs and prices falling, we would not expect much upward movement. On top of this, landlords remain concerned about Brexit, putting tenants into a strong negotiating position” explains Naomi Heaton, chief executive of LCP.
“Nevertheless the average length of tenancies is increasing, standing at 455 days in 2018 and the anticipated exodus of citizens from the EU27 following the Brexit vote has not materialised” she notes.
“They currently account for over 40 per cent of the tenant base which is primarily international, with UK tenants making up under 20 per cent.
“Not surprisingly, the financial sector and millennials represent the biggest proportion of tenants. The continuing trend is for renting smaller units as budget conscious tenants prioritise prime locations over size. Consequently one bedroom flats and smaller units return better yields than their larger equivalents. Clever space optimisation and stylish interiors are becoming ever-more demanded.”