Rents for prime London real estate have increased by ten per cent in the past year, new research shows, with this trend set to continue according to analysts. Yolande Barnes, head of Savills Residential Research, explained that there are a number of factors that have contributed to the growth.
"A boost in demand from international and corporate tenants is driving values in central locations, but rental growth is underpinned by strong and growing demand from would-be buyers unable to access home ownership," she stated. The lack of new supply entering the market could also be good news for investors who already have assets in the capital.
Savills is estimating that rental growth for 2011 in the city will stand at eight per cent, while capital values will rise by six per cent over the same period. Among the London districts attracting the biggest rental rises are St John's Wood, Regents Park and Islington, the firm revealed.
Data published by Paragon at the end of June found that almost one-third of UK landlords had seen their property rental income increase during the second quarter of 2011, with some experiencing rises of up to six per cent.