As more people looked towards the regions towards the end of 2014, prime prices for both buying and renting in London started to slow their increases somewhat. However, according to new predictions, the market for prime rental properties at least is set to pick up in the next few months, with demand pushing prices higher again.
According to the report from Savills, in the months to come, the strengthening London economy and the continued expansion of sectors such as technology and telecommunications will help to strengthen levels of demand throughout the city's prime areas, and this will help push rental prices higher.
Although demand in the financial and business services sector is set to be somewhat subdued in the coming months, Savills still said that the desire to rent properties will grow. One sign that the market is getting even stronger will come in the geographical spread, as demand increases not only in the centre of the capital, but also further afield and into the commuter zones.
Savills went on to say that the improvement in prime rental prices in London should continue to improve for the next five years at least. It said that by 2020, unless a mansion tax is brought in, potentially throwing a spanner in the works, the price of renting prime properties in London could rise by as much as 17 per cent.
"Beyond London we expect the preference for prime family housing in key commuter towns to continue, with existing demand supplemented by that from those relocating to these areas and temporarily renting before buying," director of residential research at Savills.
"On the supply side, we believe a stronger sales market is also likely to reduce the impact of the accidental landlord over the medium term, causing a reduction in available rental stock at the top end of the market and supporting rental growth," he added.