LonRes Charts: % of lets achieving their initial asking price or higher
28 February 2022
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What does the chart show?
This chart looks at initial asking rents (the price at which the property was first listed) across prime areas of London and the proportion of properties let that have achieved or exceeded their asking price, as tracked by LonRes.
Over the last 15 years, an average of 27% of properties that were let achieved the full asking price or higher. This dropped back in 2020, with less than 20% (19.7%) of properties let in Q4 2020 achieving asking price or higher. Yet by the third quarter of 2021, we saw 65% of properties achieving asking price or higher. This was the first quarter on record at LonRes than more than half of properties were achieving their asking price or more. The previous high being 49% of properties let in Q3 2007.
Why the improvement?
The prime lettings market is more reactive than the sales market, with changes in levels of supply and demand for rental properties quickly impacting achieved rents.
In 2020 we saw the level of new rental stock reach record highs. As the country locked down the flow of rental properties reaching the market didn’t slow to the same extent that we saw in sales. This, combined with fewer new tenants searching for homes in central London supply continued to exceed demand.
What does this mean?
Less choice and more properties achieving their asking price means that rents continue to increase. The LonRes Prime London Lettings Index has recorded the highest annual increase in achieved rents in Q4 2021 (compared with the same quarter a year earlier) since 2008 and gross yields are improving too.
Chart source: LonRes.
*LonRes Prime London spans three core areas:
Prime Central London takes in: SW1X, SW1W, SW1A, SW3, SW7, SW10, W1K, W1J, W8
Prime London takes in: NW1, NW3, NW8, SW1P, SW1V, W1T, W1H, W1U, W1G, W1W, W2, W11, W14,
Prime Fringe includes: SE1, SE11, SW4, SW5, SW6, SW11, W4, W6, W9, W10