Here is an interesting update for landlords in Prime Central London - average rental values remained unaltered in July, ending a pattern of monthly declines that began in October 2015, according to the latest Prime Central Lettings Index by global real estate advisory firm Knight Frank.
The annual rental growth improved marginally in July. Rental values have fallen since the end of 2015 because of higher levels of stock, which means the market has been tipped in the favour of tenants. More property came onto the lettings market because of uncertainty over the short-term trajectory of price growth in the sales market following successive tax hikes.
Tax changes affecting landlords appear to be one reason the market balance to be tipping back the other way. Curbs on mortgage tax relief and a 3 per cent stamp duty surcharge are among the reasons some landlords have reassessed their property portfolios.
The Council of Mortgage Lenders revised its forecast for buy-to-let lending in 2018 by 13 per cent to £33 billion. The other factor that will further tighten supply in the Prime Central London lettings market is that the sales market is assimilating stamp duty changes, Knight Frank said.
Demand indicators are rising, again supporting rental values. The number of tenancies agreed in the first six months of the year was 28.2% higher than 2016