Prime rental values in the Home Counties rose by 1.9 per cent between April and June, driven by the recovering UK economy and an increase in rental demand from corporate tenants. Annual rental growth stands at 4 percent.
The spring and summer months are often the most active for the Home Counties rental market with corporate demand peaking as families relocating for work look to move before the start of the new school year.
And while corporate demand is not back to the same levels seen before the financial crisis, it has stepped up notably. Between April and June, corporate tenants made up some 47 percent of all tenancies commenced across the Home Counties, up from 29 percent during the comparable period in 2014.
Corporate demand came from a range of industries in the three months to June, including the oil and gas, technology and pharmaceutical sectors, as well as from finance workers.
Additionally, there is anecdotal evidence to suggest that corporations are also stepping up their budgets which has translated into more competition for larger properties.
This is certainly reflected in stronger rental growth being recorded in larger properties than smaller ones in Q2. Demand for prime rental properties in the Home Counties continues to be widespread, with some 47 per cent of tenants coming from outside of the UK between April and June, led by individuals from North America.
Tenants relocating from the US are often most active during the first half of the year, with many looking to complete moves ahead of the American and International school term starting in August.
The number of potential tenants, both corporate and private, registering with Knight Frank lettings agents so far this year rose by 7 percent, compared to the same period last year. The number of applicant viewings was 24 percent higher over the same time, an indication that activity should continue to be robust in the coming months.
Gordon Hood, Head of Ascot lettings at Knight Frank, commented:
“The growth in the market has been fuelled by strong demand from overseas tenants. Over the last 12 months we have seen an increase in tenants from abroad relocating to prime rental markets in the Home Counties. In this time, Knight Frank has let properties to international tenants from America, South America, Canada, South Africa, France, Russia and Australia.”
“The market benefits from well-regarded international schools, which are highly prized by corporate tenants relocating to the area.”