Data from London property data consultancy LonRes suggests supply in prime areas of the capital is improving and so rental growth is slowing.

LonRes, reporting on last month’s market performance, says the usual seasonal lettings slowdown continued in December, with the prime London rental market remaining quiet and average rents falling month-on-month.  Annual rental growth declined to 3.5%, the lowest level in 29 months, but rental values remain 29% higher than their 2017-19 (pre-pandemic) average. 

Rental growth across LonRes’s three sub-markets has followed similar trends over the past few years, with the falls through 2020 and subsequent recovery approximately equal in timing and scale.  But in recent months it is its prime catchment area – including neighbourhoods such as St. John’s Wood, Notting Hill and Marylebone – that has outperformed, with values not yet falling back like in other areas.

The number of newly agreed lets in December fell by 11.7% compared to a year earlier, while the figure for the full calendar year was similarly down 10.3%. New instructions rose in December by 2.8% on an annual basis, with 2023 in total 1.7% down vs 2022, recovering from a very slow start to the year.