Those of us who drive into Chelsea from the outer environs of London spend the first 10 minutes of the day trudging through snow and scraping the ice from our cars. Once we get into Chelsea we have, each of us, observed that there is no snow; barely a snow flake or icicle to speak of! This is probably just as well, as most of our applicants would be less likely to venture out quite so eagerly to buy or rent a property if they had to deal with the snow and ice factor!

My own expertise is in lettings which I have been doing for the best part of 20 years and the market has certainly moved on since those early days! The growth has been huge in rentals with the odd blip over the years, the most recent being in 2008/2009 when recession hit and rents had to be reduced due to the sheer number of available properties. However, it wasn’t long before rents were on the rise again and, even now, with yet another recession biting hard in some businesses, we are seeing rental figures holding their own.

My own job involves negotiating the renewal terms of existing tenancies and recommending rent increases whilst maintaining a good relationship with both parties.

The Retail Price Index (RPI) is the benchmark for rent increases and throughout the course of 2011 we saw the level of RPI float between 4.8% and 5.6% and this assisted in achieving healthy rent increases for our clients. However January has seen the RPI drop to 3.9% its lowest level since February 2010, and both the Office for National Statistics and Income Data Services expect this to drop further to 3.4% in April 2012 before recovering to 3.6% in July 2012, prospects for large rent increases in the coming year are low.

The major contributor to this downward shift in RPI is the effect of the VAT increase in January 2011 falling out of the annual measure coupled with downward pressures from motoring expenditure, alcoholic drinks, food and tobacco. With inflation forecast to steadily fall back to around 2.5% by the final quarter of 2012, a return to the 2011 RPI levels is not expected in the short term.

However, the RPI isn’t the only tool with which to reach a conclusion on a rent increase. There are many other factors for both parties to consider such as void periods for landlords and for tenants, removal costs, finding a new deposit and the time factor involved with finding a new home are just a few.

As with almost all things in life, the property market has its ups and downs but an investment in The Royal Borough of Kensington and Chelsea will, in general, produce a good yield with the long term in mind.