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LONDON-The London residential rental market is slowing down. That’s the conclusion of research by estate agent Cluttons. Following strong rental value growth in the first half of 2001 and a greater balance between demand and supply, London rental values only grew, on average, by 0.7% three months to 1 September. On an annual basis, rental values rose by 5.6%, the lowest annual growth rate for more than two years.

The agent claimed there was a healthy upturn in August. After a slow start to the summer period, with lower of demand, the central London rentals market experienced an extremely buoyant August, with high levels of activity all markets. With the increase in demand, a number also noted a greater urgency within their market, as people became more wary of losing their chosen property. However, this factor does not seem to have been fully reflected in values in all areas.

As sales price growth outpaced rental value growth, gross yields fell. However, during the continued weakness of stock markets over the quarter to 1 September, property has proved to be a popular alternative asset for investors, a fact born out by a number of investment purchases, most notably in London’s Docklands.

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