Prime London rents rise first time in six months, but supply outweighs demand, says Knight Frank

Share Article

Prime London rents increased by 0.1% in April, following falls in the preceding six months, rents have now risen 1.2% over the past 12 months and new tenant registrations (up 5% year-on-year in the three months to April) are not keeping pace with new property instructions (up 56%). The ratio of new applicants to new instructions was 2.9 in April compared to 4.3 a year earlier.

Knight Frank logo

Knight Frank

Landlords should not expect a rapid rise in rents in the next few months, as demand is currently failing to keep pace with supply.

Prime central London rents increased by 0.1% in April, but landlords should not expect a rapid rise in the next few months, Liam Bailey, Head of Knight Frank Residential Research explains:

Prime London rents increased in April for the first time in six months according to Knight Frank’s Prime Central London Rental Index.

Although the rise was just 0.1% and followed falls totalling 0.8% in the six months to March, rents have now risen by 1.2% over the past year.

But landlords should not expect a rapid rise in rents in the next few months, as demand is currently failing to keep pace with supply.

Although new property instructions were up 56%, and new tenancy starts were up 40%, in the three months to April compared to the same period in 2011, new tenant registrations were up by just 5% and property viewings up by 15%.

Further confirmation of this gap comes in the form of the ratio of new applicants to new instructions, which last year stood at 4.3 and this year, to date, stands at just 2.9.

This can be explained by the continued lull in the City employment market and restricted budgets, both individual and corporate. It can also be attributed to the continued strength of the sales market in prime London, which is encouraging some to buy rather than rent.

Within the prime market, there are differences in performance. Belgravia for example saw prices rise by 1.2% in April while Hyde Park saw a 0.9% fall. And while some two- or three-bedroom houses in the £1,700 to £1,800 per week price range in Knightsbridge, for example, are failing to attract attention, properties in certain developments in the area are proving quite the opposite and achieving good rents.

Our view remains that we will see a modest growth in rents (1%) in 2012, before a more sustained recovery in 2013.

For further information, please contact:

Liam Bailey, head of Residential Research, Knight Frank, +44 (0)7919 303 148, liam(dot)bailey(at)knightfrank(dot)com

Daisy Ziegler, London PR manager, Knight Frank, +44 (0)20 7861 1031, daisy(dot)ziegler(at)knightfrank(dot)com


© Knight Frank LLP 2012 - This report is published for general information only. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no legal responsibility can be accepted by Knight Frank Residential Research or Knight Frank LLP for any loss or damage resultant from the contents of this document.

As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is allowed with proper reference to Knight Frank Residential Research. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Registered office: 55 Baker Street, London, W1U 8AN.

The Knight Frank Prime Central London Index, established in 1976, is the longest running and most comprehensive index covering the prime central London residential marketplace.

The index is based on a repeat valuation methodology that tracks capital values of prime central London residential property. 'Prime central London' is defined in the index as covering: Belgravia, Chelsea, Hyde Park, Kensington, Knightsbridge, Marylebone, Mayfair, Notting Hill, Hyde Park, Riverside*, The City and Fringe and St John’s Wood. 'Prime London' comprises all areas in prime central London, and in addition Canary Wharf, Fulham, Hampstead, Richmond, Wandsworth, Wapping and Wimbledon. * Riverside covers the Thames riverfront from Battersea Bridge in the west running east to encompass London’s South Bank.

Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 242 offices, in 43 countries, across six continents. More than 7,067 professionals handle in excess of US$817 billion (£498 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Gareth McConnell
Visit website