London Landlords Cut Luxury-Home Rents as Brexit Damps Demand

(Bloomberg) -- Rents for luxury homes in central London's best districts fell 5.1 percent in February from a year earlier as the U.K.'s plan to quit the European Union discouraged companies from moving employees to the city, according to Knight Frank LLP.

The number of prime properties coming onto the market rose 24 percent, exceeding the number of additional prospective tenants, the property broker said in a report on Tuesday. That was partly caused by higher stamp-duty rates, which encouraged homeowners to rent out their properties rather than selling them.

“The number of tenancies agreed is rising overall, but demand is weaker among senior executives due to wider economic uncertainty surrounding issues that include Brexit,” Tom Bill, head of London residential at Knight Frank, wrote in the report.

Successive tax increases in 2014 and 2016 created a flood of new rental properties. Brexit-induced uncertainty has also added to the glut of properties as companies curb transfers of employees to the capital.

“Prime central London remains a tenants' market and landlords are having to remain competitive on asking rents to minimize void periods,” Bill said.

To contact the reporter on this story: Sharon Smyth in London at ssmyth2@bloomberg.net.

To contact the editors responsible for this story: Neil Callanan at ncallanan@bloomberg.net, Andrew Blackman, Ross Larsen