Thanks to the change in stamp duty rates, restrictions on lending and a rising pound, sales of properties across London have been slowing. The widely anticipated post-election “bounce” simply has not happened, resulting in plateauing prices and a decrease in transaction numbers. While sales market suffers, though, the lettings market is experiencing a resurgence with rental values seeing a dramatic increase across almost all London postcodes.
The latest figures from Benham & Reeves Estate Agents who have thirteen lettings branches across the Capital, show rental values surging ahead by at least two to four per cent over the last quarter, with particularly strong growth in prime central London. South Kensington saw rents increase by over seven per cent on average with similar rises in parts of Chelsea. Huge increases were also seen in parts of trendy east London with massive gains of over 11 per cent in both Bethnal Green and Bow. These gains were particularly impressive given that both areas saw increases of over four per cent last quarter.
Only a handful of areas saw decreases in rental values and even these were modest. Notting Hill saw values decrease by less than 1.5 per cent and Battersea and Vauxhall saw rents decrease by less than one per cent.
“When George Osborne reformed the stamp duty system in his Autumn Statement last December, it had a huge impact on the property market in London. Most homebuyers in London are paying considerably more in stamp duty with the top rate now standing at a staggering 12 per cent,” comments Marc von Grundherr, Lettings Director of Benham & Reeves Lettings, “Inevitably, people are choosing to rent rather than buy and even those who are hoping to buy will end up renting for longer to save for this additional cost. The stamp duty changes have been a gift horse for many landlords who have seen rents stagnate over the last few quarters.”
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