Prime rental values in the Home Counties in England rose by 1.9% 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% as corporate demand makes the spring and summer months the most active 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, according to the latest index from real estate firm Knight Frank.
Between April and June, corporate tenants made up some 47% of all tenancies commenced across the Home Counties, up from 29% during the comparable period in 2014.
In the area, which comprises the counties of Berkshire, Buckinghamshire, Essex, Hertfordshire, Kent, Surrey, and Sussex, quarterly rental growth for one bedroom listings was 0.4% compared to 1.5% for four bedroom homes.
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, according to Oliver Knight of the firm’s residential research team.
‘Additionally, there is anecdotal evidence to suggest that corporations are also stepping up their budgets which has translated into more competition for larger listings. This is certainly reflected in stronger rental growth being recorded in larger listings than smaller ones in the second quarter,’ he said.
He also pointed out that demand for prime rental listings in the Home Counties continues to be widespread, with some 47% of tenants coming from outside of the UK between April and June, led by tenants 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,’ explained Knight.
A breakdown of the figures show that overall 53% of tenants are from the UK, 27% from North America, 7% from both South America and Europe and 3% from both Asia Pacific and Africa.
The index report also shows that the number of potential tenants, both corporate and private, registering with Knight Frank lettings agents so far this year rose by 7%, compared to the same period last year. The number of applicant viewings was 24% higher over the same time, which Knight said is an indication that activity should continue to be robust in the coming months.
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Source: Property News Spain