Landlords are not only considering selling up in Prime Central London, but they’re now faced with lower prices if they find a buyer.
That’s the news from Knight Frank which says landlords are exploring a sale because of additional costs and regulations from the Renters Rights Bill and the prospect of stricter energy efficiency rules.
But the agency warns that achieving their asking price is not guaranteed.
Average prices in prime central London (PCL) fell 2.5% in the year to June, which was the second largest fall since March 2021.
Meanwhile, prices in the more domestic and needs-driven market of prime outer London (POL) are under pressure due to higher levels of supply. As well as an overhang of stock following March’s stamp duty cliff edge, there is competition from other landlords who are also trying to sell.
The result is that some owners are caught in the no man’s land between selling and renting out their property.
“There is a sense of limbo at the moment in the lettings market. We have the Renters’ Rights Bill on the horizon but there is speculation that it could be delayed” says Gary Hall, head of lettings at Knight Frank.
“Those landlords that are trying to sell are finding they are not necessarily able to do so quickly because there is so much stock around. A number of them are therefore bouncing between lettings and sales and back again after failing to get their asking price.”
As more landlords attempt to sell, the result is fewer new properties available to let.
The number of lettings instructions from landlords fell 8% in the year to June compared to the previous 12 months, Knight Frank data shows.
It tallies with data from Rightmove, which shows the number of new rental listings in prime central and outer London was 11% below the five-year average (excluding 2020) in the first six months of the year.