http://www.independent.co.uk/news/business/news/job-losses-in-city-hit-rental-market-6814071.html

Monday, 13 February 2012 10:27

Thousands of City job losses are hitting London's top-end rental market as bonuses are slashed and banks cut back on accommodation budgets, according to the estate agency Knight Frank.

The company's central London index showed that rents fell back by 0.2 per cent in January, leaving them 0.6 per cent below their September 2011 peak. Rental costs are are still 7 per cent higher than a year ago, but the agency said the market is likely to remain sluggish.

Knight Frank's head of residential research, Liam Bailey, said: "There are signs that the weakness in the City of London jobs market – where new employment vacancies are down 51 per cent year-on-year at the current time – is beginning to feed through to the rental sector.

"With the banking sector expected to deliver much lower bonuses in the first quarter of 2012 compared to last year, tenants who are building deposits for eventual entry to the housing market are looking to reduce their rental costs in the interim."