Renters are ditching swanky new builds in favour of quality older homes, according to property advisors London Central Portfolio (LCP).
Oversupply in popular building areas for new homes is pushing lettings prices down, while squeezed Londoners are prioritising location over space and taking up older flats in central areas.
The availability of flats to rent in the stretch between Battersea and Nine Elms has increased by 28.1 per cent as 22,000 new units come to market.
But LCP points out that the number of properties let dropped 14.8 per cent over the last three months, while the average property has a 6 per cent discount on the asking rent.
All this has resulted in a 2.8 per cent fall in achieved rents
Naomi Heaton, CEO of LCP, commented: “In much the same way as we see in the sales market, there is increasing fragmentation in the lettings market, according to property type (new build or traditional stock) and by price point."
In prime central London, where stock levels have increased by just 5 per cent, rents have seen a rise of 1.5 per cent over the last three months. The number of properties being let has also seen a 2.5 per cent increase over the same period.
Heaton comments “In contrast to the dynamics south of the river, the mainstream rental market in prime central London has continued to perform positively as demand for well-presented rental property remains high and stock remains scarce.”
Although an average fall of 1.2 per cent in London rents has been reported, newly renovated one bedroom properties in central locations demonstrated a 6.7 per cent rental increase this year.
The performance of the rental market follows a dip in London property sales, especially at the luxury end as buyers were put off by higher stamp duty.
LCP reported that sales of new build properties in 2016 were down as much as 41 per cent in the capital, while the average price fell by 8.7 per cent.