London's high-end rental market celebrates third quarter

London s high-end rental market has just wrapped up a highly buoyant third quarter, according to a report from London Central Portfolio.

While the results may have been lively, they won't have reflected the chaotic economic conditions that have just struck in the country.

A shortage of rental stock and high demand cut the time that prime rental homes sat vacant during the three month period from July to September. In happy news for landlords, properties spent just 9.7 days on the market before finding a tenant in the third quarter, compared to a longtime average of 31.8 days, according to the report.

A combination of high demand and low stock, as well as a surge in demand as overseas tenants return to London, pushed up prices during the third quarter, leading to bidding wars.

This is a strong quarter for rental activity in prime central London. Andrew Weir, CEO of London Central Portfolio, said in the report that the number of tenants returning to London and opting to carry on renting has gone up as the economic outlook looks uncertain.

The rental market is more buoyant despite the number of external factors affecting the sales market. He added that rents for renewals and re-lets increased by nearly 5% and 18% in the first three months.

Market conditions for the fourth quarter may be very different from what the sector has just seen.

The pound hit an all-time low in the span of just weeks, living costs went up, the country s longest reigning monarch died, and the newly appointed government abruptly walked back the plan after global markets crashed.

According to experts, there is a jump in demand from international investors who will be lured by the weak currency to London, even though it will be a long time before any impact is recorded in the housing market.

A weakened pound means that many foreign buyers are benefitting from a dramatic boost in purchasing power, according to Marc von Grundherr, director of Benham and Reeves, in a separate report Tuesday. Prime London sales start to climb over the next few months, and this is bad news for the wider economy.