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London Rental Market Lags Rest of UK

LONDON-London's residential lettings market is lagging behind the rest of the UK, with a surplus of properties on the market continuing to depress rents. But overall residential property is performing well for investors.

By Graham Parker | Updated on December 10, 2003

LONDON Across the UK the residential lettings market remains robust, with both tenant demand and buy-to-let investment continuing to rise, according to the latest reports RICS survey. But in London and the Southeast, market activity is distinctly more subdued and an oversupply of property has led to a further fall in rents.

On average rents across Britain have shown modest increases with a net 5% of surveyors reporting a rise in rents for the quarter to October. Chartered surveyors reported a healthy increase in tenant demand in the quarter to October with a net 23% of surveyors reported a rise in lettings activity for the quarter to October. Activity remained strongest in the Midlands, the North and South West with London and the South East showing a more limited rise.

Demand remained stronger for flats than houses – a net 22% of surveyors reported a rise in demand for flats, whereas only a net 14% reported a rise in demand for houses over the same period. And a net 28% of surveyors reported a rise in investors bringing property onto the rental market. This was below the figure of 36 percent reported in July and slightly below that of the same period last year. New instructions increased for both flats and houses.

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