4 Aug

Flats to rent in London poised for success in east City

Flats to rent in London poised for success in east City

The prime residential market of flats to rent in London is being boosted by financial sector workers, research by Savills has revealed.

In Canary Wharf and Wapping, price growth slowed to 0.4 per cent, but annual growth remained in good health at 11.6 per cent, while rentals look set to outpace capital values after rising 6.4 per cent in the first half of 2011.

Meanwhile, the five-year growth forecast by Savills for property to rent in London's east of the City climbed to 38.9 per cent, outpacing all the rest of the capital's mainstream.

These promising figures are partly due to the presence of investors, who are attracted by the prospect of high yields from flats to rent in London, according to Katy Warrick of Savills London residential research.

"But for owner occupiers the market remains affected by the constrained mortgage market, as even high earning young executives - typically the highly geared buyers of the boom years - face challenges in securing earnings based mortgage finance," she added.

Rental growth in the prime East of the City is expected to flatten out slightly, ending the year ten per cent up, compared with nine per cent across the rest of mainstream London, the report additionally revealed.

Two years of low levels of delivery mean that supply has been absorbed to a large degree by owner-occupiers and investor buyers, while there is very little unsold stock remaining to choose from.

"Rental growth, closely linked to employment in the financial and business services sector, will be fuelled by a lack of new build supply and growing demand from well-paid executives still frozen out of owner occupation," Ms Warrick went on to say.

This comes shortly after a separate study by Knight Frank said prime central London sales and lettings have both reached an all-time high, at 35 per cent above the post credit crunch trough seen in March 2009.ADNFCR-1222-ID-800690445-ADNFCR

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