Categorized | International

Rents Fall for First Time in Two Years in London

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For the first time since June of 2009, residential rents dropped in London. Rents dropped one tenth of a percentage point in October, which leads some analysts to believe that the rental market may be nearing its current peak.

The rental market had hit a low point in June of 2009, and since that month, it has experienced an increase of twenty-nine percent. Those that invested in the rental real estate market at that time have taken home more than eighteen percent in annual returns. Despite the recent drop in October, rent prices were up in the city for the third quarter.

Rent prices for prime London real estate continue to push higher, and are closing in on an all-time high. They are now currently two percent higher than their previous peak, which took place in 2008.

One of the factors that has led to rent prices slowly dropping has been the slow down of the job market in London’s financial sector. There are now far fewer jobs available in the sector in comparison to the numbers from one year ago. In addition, tenants have been taking their time on choosing an apartment in recent months, which shows a decrease in demand. In a typical high demand market, tenants would look to sign a lease immediately to avoid missing out on a place.

Many analysts have weighed in on the stagnation of rent prices in the month of October, and believe that it is a sign of what is to come in the fourth quarter of the fiscal year. With that said, rent prices are expected to rise next year as well, though not at the same high rates as experienced during this past year.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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