Residential property prices in London are starting to level out after falling in 2008 due to an oversupply of stock in the market, according to the latest research. Rents began falling dramatically in the city in April 2008 as more and more property owners put their houses and flats up for rental as they were unable to sell, the research from estate agents Winkworth shows.
Between April and September 2008 house rents plummeted 17.03% and those for apartments dropped 10.84% in the same period, the company revealed. But Winkworth’s latest Property Price Guide for summer 2009 shows a brighter outlook for rents. As sales started to improve in 2009, so lettings appear to be stabilising.
Although apartment rents fell by 10% and house rents were down 12% between October 2008 and June 2009, the decrease is less defined than the first steep fall of April 2008 to September 2008.
In some areas, such as Harringay, Edgware and Clerkenwell, the rents for some properties have actually gone up. The report also show that houses have experienced a more marked decrease in price fall compared to flats, thanks to falling supply levels.
As properties are starting to sell again, there is no longer the quantity of sales conversions that existed in 2008, the report points out. Rental stock levels for both apartments and houses have decreased by almost 10% since January this year.
So as supply levels fall, demand for rental properties rises, and therefore rents are starting to stabilise and Winkworth believes the bottom of the rentals market in London could be in sight.
‘This is historically a busier time of year and demand has therefore increased. We still have plenty of rental stock available, but the demand is also there so properties are coming on and going off the market at about the same rate,’ said Georgina Parker, Lettings Manager of Winkworth Clerkenwell.
‘Looking to the future, I expect rents to recover in the following months as the availability of rental properties and demand from tenants come back into balance,’ she added. How will this impact property prices in London?