Buy-to-let purchases in central London are increasing, despite declining rents.
According to property agents Cluttons, average rental values have slipped by 2.3% in the last three months, taking average weekly rents to £996, the first time they have dipped below £1,000 since Q1 2011.
Knight Frank agrees that rents have dropped, saying that they are now 3.2% lower than a year ago – with a 20% rise in new rental instructions and a cull in City jobs partly to blame.
Some areas in London with formerly outstanding rental growth figures, such as Belsize Park and St John’s Wood, are now recording the steepest falls of 6% and 5.4% respectively, says Cluttons.
Knight Frank puts the fall even higher, at 9.7% for St John’s Wood.
Despite the rent falls, Cluttons says it has noted an upturn in investor buying activity over the last three months.
Cluttons’ figures suggest that buy-to-let investors made up almost 15% of sales last year.
Cluttons head of research Sue Foxley, pictured, said: “Despite the expectation of further rental falls during the first quarter of this year, investors remain unfazed and are taking a long-term view as to purchases.”