City rents hold steady as banks begin to hire

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by Gill Montia

A boost in recruitment in the banking sector has pushed up rental demand in and around the City, reports property consultants, Cluttons.

Recruitment firm Michael Page recently announced that bankers are now twice as much in demand in the UK than a year ago.

As a result, one and two-bedroomed properties in popular locations, such as Shad Thames and Wapping, are already in short supply.

However, Cluttons is not expecting rents in these areas to rise.

The firm’s partner for residential lettings, Lynn Hilton, explains: “While the revival in the employment market is continuing to impact on stock levels, the laws of supply and demand are unlikely to cause a significant rise in rents.”

She adds: “As election uncertainty persists and further City job cuts still pose a threat, negotiations between tenants and landlords remain spirited as both parties feel they have the upper hand.”

The UK’s wider housing shortage has recently been highlighted by the Council of Mortgage Lenders (CML).

Reporting on its “Future Housing” conference, the CML has suggested that “a chronic lack of supply of housing of all tenures seems set to persist”.

The lenders’ body believes that private sector funding constraints and public sector cutbacks are likely to produce a significant shortfall in the supply of both housing finance, and housing itself.

At the same time, the CML expects to see a smaller proportion of homeowners and a higher proportion of tenants, mostly in the private sector, in the years ahead.