Rental prices in London are starting to level out, according to a new report from Winkworth.
New research by Winkworth shows that rents in London are now stabilising, following the fall in 2008 caused by an over-supply of rental stock to the market.
An increase in 'accidental landlords' converting their sales properties into lettings led to the market becoming saturated last year, forcing rents down. According to Winkworth's Property Price Guides, rents for London houses fell by 17.03 per cent between April and September 2008 and flats by 10.84 per cent over the same period.
However, Winkworth's Summer 2009 Property Price Guide brings better news. As sales started to improve in the first half of 2009, there has been a positive knock-on effect for lettings as rental prices begin to stabilise. Although rents still declined between October 2008 and June 2009 (by ten per cent for flats and 12 per cent for houses), the decrease is less defined than the fall between April and September 2008. And in some areas, including Edgware and Clerkenwell, rental prices have gone up.
Rental stock levels have decreased by almost ten per cent since January 2009. As supply levels decrease, demand for rental properties rises, and therefore rents are starting to stabilise. Winkworth suggests that the bottom of the rental market could be in sight. Georgina Parker, lettings manager of Winkworth Clerkenwell, says: "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."