During the second quarter of 2019, rental values of prime property in London grew for the first time since September 2015. Indeed, there were low levels of rental growth in all regions of the capital’s prime rental market and in all price bands up to £3,000 per week (above which they remained flat).

This reflected strong market activity, in spite of Brexit uncertainty, which reduced the imbalance between supply and demand in the market.

In the prime central London market, rents are, nonetheless, still 1.7% below where they were a year ago and, on average, 16.8% below their levels of five years ago. That said, the falls of the past five years have been much less for smaller properties in the market below £1,500 per week.

By contrast, in the other prime rental markets of London (which have had much smaller net rental falls of just 4.0% during the past five years), annual rental growth returned, as tenants continue to widen their search in the hunt for value.

Rents of prime property in the commuter zone also rose marginally in the second quarter. This follows a recent trend of modest rental growth in the first half of the year in these markets. But, in each of the past four years, this has been followed by small falls in the second half of the year.

If anything, rental growth in the first six months of this year in the commuter zone has been weaker than previously. That leaves net rents on average 1.8% lower than five years ago, with net rental growth of properties of up to four bedrooms (most notably in urban areas) being offset by five-year rental falls of properties of five bedrooms or more.

Positive signs Prime residential rents in London and its commuter zone showed low levels of growth in Q2

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