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News: significant increase in floor space for London rental occupiers
New research has revealed that the balance of bargaining power has shifted from landlords to tenants in London’s prime residential lettings market as increased stock levels have given tenants greater choice.
The Chesterton Humberts report
In a report compiled by Chesterton Humberts, it was clearly revealed that the shift of power has been a gradual process over the past year as landlords were encouraged to buy and let real estate to potential tenants. This practice has led to a greater availability of floor space which was up 19% in 2012.
The demand aspect
Demand for floor space was provided by corporate tenants who comprised a large proportion of prime central London lettings market, are now looking for better quality accommodation for their money. Rents have come down dramatically due to the increased supply in floor space and the choosy nature of tenants when weighing accommodation options.
The report said many tenants have been operating on reduced budgets and are looking for better value, even if it means moving away from their preferred central locations. Nevertheless, investors have still been benefitting from healthy capital growth and provided they are realistic about setting their rental levels, there will still be plenty of tenant demand around to keep prices stable.