Research conducted by Winkworth Estate Agents shows that rental prices in London are starting to level out, after falling in 2008 due to an over-supply of rental stock to the market.

In 2008, as more and more sales properties were converted into rentals, the lettings market became saturated, and rents then started to fall.  Winkworth’s Property Price Guides, including figures compiled from its 56 London offices, shows that rents fell dramatically after April 2008.  Rents for houses in London fell by 17.03% between April and September 2008 and flats by 10.84% during the same period.

2009 Sees Rents Price Fall Decelerating

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.  Our research shows that, after the steep fall from April – September 2008, rents in London are levelling out.  Although rents fell by 10% (flats) and 12% (houses) between October 2008 and June 2009, the decrease is less defined than the first fall of April 2008 – September 2008.    In some areas, such as Harringay, Edgware and Clerkenwell, the rents for some properties have actually gone up.  The figures 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.  Figures taken from Winkworth’s website reveal that rental stock levels (flats and houses) have decreased by almost 10% since January this year (fig. 3).  As supply levels fall, demand for rental properties rises, and therefore rents are starting to stabilise.  Winkworth believes the bottom of the rentals market in London could be in sight.  Georgina Parker, Lettings Manager of Winkworth Clerkenwell says:

‘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.  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.’