London-focused property data firm LonRes, which analyses activity in the capital’s prime areas, said annual rental growth rose to 1.4 per cent in July, but was still below recent levels.
Average rents in London’s prime areas are 29.6% higher than their pre-pandemic average from 2017-2019.
But LonRes data for July suggests a 3.9% year-on-year decline in leases agreed, while new orders rose 9.7%, with activity in both areas well below pre-pandemic levels.
The inventory of available rental properties is gradually recovering, but is still far from pre-pandemic levels.
Across all price ranges, there were 11.4% more homes on the market at the end of July than a year ago, but 52.6% fewer than five years ago. Broken down by price range, availability at lower rental values has started to increase, but there is still a long way to go compared to the top end of the prime rental market.
Below £750 a week, availability was 6.2% higher at the end of July than a year earlier, but is still more than 70% below levels five years ago. Above £2,000 a week, the recovery to pre-pandemic levels is almost complete – available stock is now just 20% below levels five years ago.
On the sell side, London’s prime market saw a recovery in transactions in July, according to LonRes, even as prices continued to fall.
In London’s best boroughs, values fell by 4.9% year-on-year, remaining broadly at pre-pandemic levels in 2017-2019 (+0.6%).
Sales activity recorded its most positive month of the year so far, with 8.7% more transactions than in July 2023, 23.7% more than the July average for 2017-2019 (pre-pandemic).
The number of homes on offer also increased in July, up 23.6% from the same month last year. Some of this growth can be attributed to the weak performance in June, when the sales market slowed in the run-up to the election and sales were put on hold. But the immediate rebound suggests sentiment is moving in the right direction.
New sales orders remained unchanged year-on-year in July and were 2.3% above the July average for 2017-2019.
