Leading agent urges landlords to hold out for capital appreciation

Liam Monaghan, managing director of London Central Portfolio, advises landlords in prime central London to hold out for capital appreciation, suggesting that it may be imminent despite concerns over tax clampdowns and the Renters Rights Bill. He believes the market is stabilising and could attract investors as a safe haven amidst global economic uncertainty.

Rental values in PCL have been gradually stabilising since a post-Covid spike in 2022, with rents now 23.6% higher than in 2019. Renewals in Q1 2025 saw moderate growth of 5.67%, while re-let rents increased by 1.72%, a slower pace compared to late 2024. The average tenancy length hit a record 36.1 months, driven by limited stock, encouraging tenants to extend leases rather than enter the competitive rental market.

Vacant properties took an average of 21.4 days to let in Q1, slightly longer than previous periods but still below pre-pandemic levels. Tenants from the EU remained the largest group at 47%, while UK tenants declined by 13%. There was a notable decrease in banking and finance sector tenants, while professional services and retail sector tenants increased. Students continue to represent a significant portion of new move-ins at 24%.

The rental market is expected to continue stabilising, with Monaghan predicting a reduction in vacancy periods as the year progresses.