View this email in your browser
Dear *|FNAME|*
More bad news for London's new builds as tenants target period stock. 
Increase in new units sees rental discounts and 15% fall in properties let
Following London Central Portfolio’s recent report on the new build crisis in London, where sales have fallen as much as 41%, LCP has now analysed the effect that this crisis is having on the rental market.
  • The number of available properties to rent around the Battersea – Nine Elms Stretch (SE11, SW11, SW8) has increased 28.1% in the last three month compared with last year as multiple units in new developments come to market
  • Over the last quarter, there has been a 6% discount on asking rents
  • The number of properties to let has also fallen 14.8% in the last three months
  • This has resulted in a 2.8% fall in achieved rents as supply outweighs demand
  • The picture has been far more positive in Prime Central London where there is limited new build potential
  • Rents here have increased 1.5% over the last three months
  • The number of properties let has also increased by 2.5%
 Reports published last week, based on HomeLet statistics, highlighted a slowdown in London rents, reflecting the first annual fall in values (1.2%) since 2009. Whilst this has been generally attributed to the Brexit-effect, figures analysed by London Central Portfolio indicate a more nuanced picture for the lettings market which is now being impacted by a proliferation of new developments, resulting in supply beginning to outweigh demand in some areas.
 
According to LCP, the London market, South of the River, is beginning to suffer as large numbers of the planned 22,000 units between Battersea and Nine Elms have come to market. Typically purchased by foreign buyers as rental investments, data analysed by LCP demonstrates a significant annual increase in available rental properties in this area amounting to 28.1%. This has been accompanied by a 6% discount on asking rents over the last three months.
 
Alongside an increased supply of properties with reduced asking prices, the number of properties actually let has dropped 14.8% over the same period and there has been a fall in achieved rents of 2.8%. This is due to tenants increased bargaining power and has been exacerbated by high asking rents for flats in new developments, at a time when corporate housing budgets are being tightened.
 
Naomi Heaton, CEO of LCP, comments: “In much the same way as we see in the sales market, there is increasing fragmentation in the lettings market, according to property type (new build or traditional stock) and by price point. Alongside the oversupply of rental stock in new build heartlands, the uncertain economic outlook has resulted in tighter tenant budgets. It is therefore not surprising that recent reports indicate a 14.8% fall in the number of properties rented South of the River over the last three months and a 6% discount on asking rents.”
 
However, according to LCP, the picture for the rental market has been far more robust in areas with limited new build potential.
 
In Prime Central London, where stock levels have increased by just 5%, rents have not been negatively impacted and have seen a rise of 1.5% over the last three months. The number of properties being let has also seen a 2.5% increase over the same period.
 
Heaton comments “In contrast to the dynamics South of the River, the mainstream rental market in PCL has continued to perform positively as demand for well-presented rental property remains high and stock remains scarce.
 
“LCP’s portfolio targets 1 and 2 bedroom properties in PCL. During the Credit Crunch, occupancy rates remained at 96% despite a contraction in the financial sector of 1/3. With housing budgets being squeezed again, we are once again seeing tenants prioritising location over size and shirking higher priced new developments for quality period stock. In contrast to the average 1.2% fall in London rents being reported, newly renovated 1 bedroom properties in PCL, for example, have demonstrated a 6.7% rental increase this year.
ENDS
 
For further information contact: Lauren Kemp, PR Manager on +44(0) 20 7723 1733 or lauren@londoncentralportfolio.com
 
About London Central Portfolio Limited (LCP):

LCP is a specialist residential property advisor focusing on Prime Central London. It has an extensive private client practice and has successfully brought multiple funds to market, capitalising on this sector. www.londoncentralportfolio.com
 
The information in this Internet email is confidential and may be legally privileged. The contents must not be disclosed to nor used by anyone other than the above-named recipient(s). E-mails are susceptible to interference. You should not assume that the contents of this e-mail originated from London Central Portfolio Limited (LCP) or that they have been accurately reproduced from their original form. If in doubt, please verify the authenticity with the sender. LCP accepts no responsibility for information provided, errors or omissions in this e-mail or use or misuse thereof. Each page attached hereto must be read in conjunction with this disclaimer. London Central Portfolio Limited is registered in England, Company No. 2494797. It is licensed and regulated by the National Association of Estate Agents (NAEA) and the National Approved Lettings Scheme (NALS) and is a member of The Property Ombudsman Scheme (TPO). It is an Appointed Representative of Clear Insurance Management Ltd (authorised and regulated by the Financial Conduct Authority) in respect of general insurance business. LCP Corp Limited is registered in England, Company No. 08823097. LCP HQ is registered in England, Company No. 08820665. LCP Capital Investments Limited is registered in England, Company No. 09634810. It is an Appointed Representative of F2 Capital Ventures LLP (authorised and regulated by the Financial Conduct Authority) in respect of investment business. Please note that it promotes investments but does not provide investment advice to retail investors. If you are considering an investment, you should obtain independent advice. Registered office of each company: 155 Sheen Road, Richmond, Surrey, TW9 1YS. Group VAT Reg No. 182 2473 10.
 
Copyright © *|CURRENT_YEAR|* *|LIST:COMPANY|*, All rights reserved.

Our mailing address is:
London Central Portfolio
LCP House, Ogle Street, London, W1W 6HU

unsubscribe from this list    update subscription preferences 

*|IF:REWARDS|* *|HTML:REWARDS|* *|END:IF|*