According to the IMF forecast the UK economy in 2014 will surpass the economies of all advanced countries

Rents for luxury properties in Central London has been steadily increasing for the eighth consecutive month. In October 2014, rent growth reached its two-year value. According to data provided by Knight Frank, the cost of rent the Prime real estate of Central London in October rose 0.5 % and continues to grow at the fastest pace in three years.

Since the beginning of 2014 the increase in rent on a luxury estate has already reached 2.6 percent , the number of lease transactions rose by a quarter, and the number of tenants has grown by a third.

Increased the profitability of landlords. In October, the growth of income of owners of luxury real estate reached its highest level in three years and amounted to 2.9%.

According to the International Monetary Fund’s forecast, in 2014 the growth of the UK economy will surpass the economies of other developed countries. At the same time, the market for the sale of residential real estate, especially luxury real estate market is waiting for the cooling in connection with the expectations in regard to the prospect of introducing a “mansion tax” ahead of elections in may 2015. The cooling of the market of sale always leads to the strengthening of the rental market. Families postpone the purchase until a more certain time, swell the ranks of renters, stimulating further demand in the rental market and pushing up rents.

The positive Outlook of the International Monetary Fund is also in accordance with the report of the consulting company Ernst & Young , according to which , the preliminary profit of British companies for the first 9 months of 2014 is at the highest level for the last 6 years.

It is possible that next year the demand for rental decline slightly and rents will no longer grow at such a pace. The complication of the procedure of the mortgage loans, which took place at the beginning of this year, banks has worked and will not be a hindering factor for the market sale. In addition, there will be clarity on the introduction of a “mansion tax” . In this case, the market rent of elite real estate of London will not experience such pressure from tenants, but the demand, according to the forecast of experts of Knight Frank , will continue to exceed supply in the housing sector. Especially the lack of three-bedroom apartments as the perfect option for families.

® Alice Morgan 06.11.2014 G.

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