Tenants have already adjusted to record rent increases of 19.1% in 2010 and now face further rises as the mortgage famine and low consumer confidence feed the demand for rental homes.
Lower budget properties (£250 – £650 per week) remain both highly sought after and in short supply, as cost-conscious tenants seek to keep their outgoings low, which is placing considerable upward pressure on rental values in this segment of the market.
However, existing tenants who wish to renew their contracts are facing smaller rises in the region of 4%, as landlords concerned about the general economic outlook opt to retain quality tenants rather than risk void periods.
Lynn Hilton, Partner for Residential Lettings, said:
"The central London lettings market is maintaining momentum during 2011, with rents forecast to grow well ahead of trend, albeit down on the record rental growth seen in 2010. Tenants are really feeling the pinch and are being forced to widen their search areas to secondary locations and beyond.
"We expect this pace of growth to slow in 2012, although it will remain well ahead of inflation."
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