London rents fall faster than house prices
Recently released figures have indicated that rents in the London area have been falling faster than property prices, and this has occurred since the collapse of Lehman Bros earlier this year.
Officials have said that because of the high number of rental properties now available, even three and four bedroom properties in central London, which had been seen as a safe bet until recently, have been hit by falling rental prices.
Many homeowners who have tried to sell their properties and have been unable to do so in the current financial climate have been forced into renting out their property in order to get some form of income from it, but in areas such as Chelsea and Kensington it is thought that increased availability has resulted in rental prices falling by around 15 or 20 percent.
Corporate demand for properties within the city has also fallen, and was fuelled by the collapse of Lehman Bros this year.
Estate agents have said that properties that may have easily achieved rents of around £1000 week previously are now being rented out at around £750-£800 a week. Since September it is thought that rental prices have fallen by around 10.6 percent and this compared to a drop of around 8.9 percent in property values over the same period.
Tags: Renting, house, london house prices, Lehman Bros, house prices, Business and EconomyOne lettings expert stated: ‘As we have seen over the last few months, more people are choosing to rent because they feel now is not the right time to sell. This is creating an over-supply which gives tenants more choice and drives prices down. In addition, the financial crisis has meant fewer international businesses are relocating staff to London. This has reduced the demand for rented family homes, especially in the most popular areas of Kensington and Chelsea.’
