Spotlight: Prime Residential Rents

Robust tenant demand for prime property, but also more discerning

Despite the uncertainty surrounding Brexit and what it might mean for the economy, tenant demand for prime property has remained surprisingly robust so far in 2019. This has contributed to a noticeable slowing in the rate of annual rental falls seen during the past two to three years, and the return of modest annual rental growth in some markets.

But that demand has also become more discerning. The message we hear is that potential tenants are focusing on two things.

The first is quality. ‘Lettability’ has become more property specific. The standard of finish has become a key differentiator, but so too has character.

The second is value for money, which among other things has made many tenants more flexible on location, and not just within London.

On the supply side, those buy to let landlords who carry mortgage debt continue to have their finances squeezed. That squeeze has tightened with restrictions on the fees agents can pass to tenants. So, politics is influencing the market beyond Brexit. And with the announcement of a consultation on how to abolish so-called ‘no-fault evictions’ it is set to continue to do so.

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