Recruitment slump is hitting cost of London home rentals
THE slump in the City job market is dragging down the cost of renting prime residential property in London.
Rents in the best areas fell 0.2 per cent, equivalent to £80 a month, according to research published today. It comes after a halving in the number of vacancies in financial services over the last year.
January rents were 0.6 per cent below the level reached in September, an all-time high, although they remain well above the level of a year ago.
Liam Bailey, head of residential research at Knight Frank, which carried out the research, said: “There are signs that the weakness in the City jobs market… is beginning to feed through to the rental sector. With the banking sector expected to deliver much lower bonuses in the first quarter of 2012 compared to last year, tenants who are building deposits for eventual entry to the housing market are looking to reduce their rental costs in the interim.”
Landlords may also have begun to adjust to the fact their customers face hard times. Rents rose 27 per cent in the two years to September 2011 yet disposable income went up by only around eight per cent over the same period, Bailey said.
Meanwhile rental budgets for corporate tenants – staff who have been asked to relocate to London by their employers – have been cut by up to 15 per cent over the past year.
The number of City job opportunities has fallen 52 per cent year on year, Morgan McKinley said recently.