London luxury-home rents rose for the first time in 21 months in January after companies relocated senior employees to the U.K. capital from overseas, Knight Frank LLP said.
Average rents for houses and apartments in the city’s most expensive neighborhoods climbed 0.2 percent from December, the first monthly increase since April 2012, an index published today by the broker showed. Rents fell 2 percent from a year earlier, the smallest drop since August 2012.
“There are more relocation agents out there catering for a greater influx of executives from overseas,” Tom Bill, a London-based associate at the company, said by phone. “Purse strings are still tighter than they were in the run-up to the credit crisis, so more people are looking in better value-for-money areas outside Knightsbridge and Mayfair.”
Permanent-staff vacancies in London during December rose by the most since January 2001, according to a report by Markit Economics. That contributed to a 19 percent increase in rental contracts during the 12 months to January, Knight Frank said.
Rents will probably start rising on an annual basis by the end of this year, Bill said. Tenants seeking cheaper homes looked in Marylebone, Hyde Park Estate and the fringes of the City of London financial district, he said.
Rental yields dropped to 2.86 percent in January from 2.88 percent in the previous month, according to the report.
The areas covered by Knight Frank’s report include Belgravia, Chelsea, Hyde Park, Islington, Kensington, Knightsbridge, Marylebone, Mayfair, Notting Hill, St. John’s Wood, the City of London and its periphery.
To contact the reporter on this story: Patrick Gower in London at firstname.lastname@example.org
To contact the editor responsible for this story: Andrew Blackman at email@example.com