Prime central London rents have dropped in price for the sixth consecutive month.
While rents are still higher than one year ago the fall has totaled 0.8 per cent since October 2011.
The drop has been put down to low hiring activity and weakening job prospects in London’s financial and business sectors, according to Knight Frank.
“These figures underline that the lettings market has been struggling since November last year,” Tim Hyatt, head of Knight Frank residential lettings and president of ARLA said.
Demand and supply has risen in London lettings market in the past three months with tenant registrations jumping up 15 per cent.
But the number of tenancies commenced has dropped by seven per cent.
At the same time the Morgan McKinley’s London Employment Monitor shows that job vacancies across the financial services sector fell by 8 per cent from February to March.
“The Morgan McKinley data is a strong indicator for corporate relocation and is a concern,” Mr Hyatt said.
But there is a good forecast on the horizon with the Olympics drawing many people to the city for the summer in need of short-term rental accommodation.
Knight Frank has seen interest from many people planning to spend the summer in the capital and also from international companies interested in hiring out entire apartment blocks to house their staff.