A shortage of rental properties remains a serious issue for us, meaning we do not have enough rental accommodation to meet applicants’ needs. This is becoming a significant problem across London. But why? Well, of course we know that some landlords have exited the market, deterred by changes to the UK’s tax system. And we know that many tenants are renewing their existing tenancies due to economic uncertainty, meaning that fewer properties are coming back onto the market. Add to this the extremely strong rental demand, particularly from young professionals and students, and we are seeing an acute shortage of rental homes for those moving to London to live, work and study.
I have just returned from one of my regular trips to meet overseas investors and clients in China. Next month, my fellow directors and I will be visiting India, then Hong Kong and Malaysia. These meetings give us a really accurate, up-to-date picture of investors’ experiences as buyers of London property. Some are reporting that they have bought in brand new developments and are now being told their letting agent cannot find them a tenant which is very frustrating when we have the opposite problem!
With rental demand so high across London, it is hard to see how this is possible but it is likely to be due to landlords buying an apartment through the development’s appointed sales agent who may be over-promising what can be achieved on the rental side. When a sales agent does not have the marketing machine behind it, or lacks the contacts and the local staff needed to secure a good tenant, it generally ends up with an apartment remaining vacant for longer than necessary in what is an exceptionally strong market. In contrast, many of our properties are often let on the first or second viewing. So it is important investors remember that the agent selling a property to you, may not have the necessary set-up to also let and manage the property quickly and efficiently.
We have waiting lists of referenced applicants at most of our lettings branches, all keen to move into popular new developments such as Nine Elms Point, Beaufort Park, London Dock, London City Island, Goodman Fields, Atlas Building, Dickens Yard and more recently, we have been getting a lot of enquiries for 250 City Road. At all these developments (and many others too), we often find ourselves completely out of stock and desperate to talk to landlords about new instructions. Any property we have usually lets within a couple of days. One apartment at Atlas Building recently let in less than two hours! So if you are a landlord with a new property to rent in London which has been vacant for more than a week or two, please get in touch with us.
This is always our busiest time of year and this year rental demand is phenomenal across our five East London branches. At times we have let virtually all our stock yet enquiries are still increasing in number. If we have the stock, we can let it very quickly. Generally, during this seasonal peak, most homes are let by early July/August so after this, stock levels become lower. Of course, students make up a lot of this demand at this time of year – from July to the end of October. We also continue to see increasing demand from professionals working for tech and financial tech companies, as well as the more traditional finance and banking sectors. In the City, rentals at the Atlas Building near Old Street continue to be one of our most successful developments and it has had an incredible response from applicants. Apartments here are simply flying out, usually after just one viewing. We’ve even had tenants trying to outbid each other for a property. Blackfriars Circus and One Blackfriars remain very popular, particularly with Chinese students who come with good budgets. We are also looking forward to the launch of Principal Tower in Bishopsgate, designed by Foster and Partners, whose upper floors will have panoramic views over the City – again we expect rental demand to be high.
Our Canary Wharf branch is also experiencing strong tenant demand yet has limited stock available. The latest phase of the popular London City Island, Goodluck Hope, will be completing in late October/November and we expect demand from applicants to be very high. Studios are expected to achieve £320-£350 per week, one beds £385-£425 per week and two beds £465 – £525 per week. Emery Wharf, the latest phase at London Dock in Wapping, is completing soon and we are already receiving new instructions at the development. Manhattan apartments are likely to achieve £450 – £500 per week, one beds £495 – £550 per week and two beds £675 – £775 per week. Royal Mint Gardens where many of our Malaysian clients have bought, is due to start completing in November/December (with one beds set to achieve £525 – £595 per week and two beds £700 – £850 per week) while Cassia House at Goodman Fields in Aldgate will also be completing in November (with asking rents at a similar level to Royal Mint Gardens) so we expect a lot of new instructions over the next few months. Our Surrey Quays branch continues to receive new instructions at Elephant Park in Elephant and Castle and tenants are showing keen interest in this new development but we really need instructions here when completions take place. While further east, Royal Arsenal Riverside simply goes from strength to strength and our Greenwich branch is reporting good demand for homes here.
Students have been at the forefront of demand for rental homes in Kensington, Knightsbridge and Hyde Park recently. There has been a real rush, with all properties under £650 per week being snapped up quickly. In fact, we have no one bed properties left at the moment so if you are a landlord with this type of property currently vacant, please do call us as we have many international students still looking for a home urgently. The majority of international students are from China and South East Asia generally as well as some Europeans. They have good budgets. We are also seeing a lot of post graduate students – also with good budgets. The highest demand is for furnished properties (very few applicants are looking for unfurnished properties) so if you have an unfurnished property it is advisable to consider furnishing it in order to ensure it lets quickly. Another noticeable trend at the moment is the desire for good security in a building. Most applicants are looking for a flat on the first floor or above (no basement or ground floor properties), as well as a porter or concierge.
At Nine Elms Point in the regenerated Nine Elms area, rental demand remains extraordinarily high. We also have waiting lists of referenced tenants waiting to move to one of the area’s developments and most properties are letting in a day or two with decent rentals. We have let all our available properties (25 flats to be precise!) at the new Gladwin Tower so are looking for more stock to fulfil applicants’ requests.
In West London, rental demand remains extremely strong at Dickens Yard in Ealing, Kew Bridge in Brentford and Imperial Wharf and Chelsea Creek in Fulham. Demand has been exceptional over the last few weeks, with apartments letting very quickly and shortages of stock remaining an issue. At one point, our Ealing branch had just one property left available to let. Apartments at all price points and sizes have been letting very quickly. We are therefore very keen to talk to landlords with properties in any of these and nearby developments who are looking to appoint an agent as we have fully referenced tenants ready to move to these areas.
Our Hammersmith branch at the Fulham Reach scheme has let almost all its stock and is looking for new instructions. Our Japan Desk is based here and they also report brisk rentals from Japanese families discovering Hammersmith and falling in love with its riverside setting and convenient Zone 2 location. Enquiry levels from applicants remain high. One and two bed apartments priced up at £875 per week are the fastest to let, usually within a few days.
Shortages of stock remain an issue in Hampstead and Highgate – with over 90% of tenants renewing, there are few rental properties coming back onto the market so there is a lot of competition amongst applicants. Clearly, this is good news for landlords and with such strong demand from tenants, over the last six months rents have been strengthening due to the lack of supply – as usual, one and two bed apartments are in particularly high demand. So most landlords are experiencing minimal voids, if any. Most mid-range properties are letting within a couple of weeks at most, usually for very close to asking rent. With a weaker sales market, landlords who had put their properties up for sale but had been unable to find a buyer, are making them available for rent again for 1 year until we get into a post-Brexit era.
Our Beaufort Park branch in Colindale is extremely busy and desperately short of stock particularly studios, one and two bed apartments. At times recently we have had only a handful of properties available to let and when new apartments come onto the market, they are usually let the same day – we simply do not have enough rental properties to match the extraordinary demand. Typical tenants are young professionals, (including corporate tenants and professionals moving to London from overseas). Demand is very high from international students studying at the nearby Middlesex University. Many have taken up university places late, through University Clearing, and need a home urgently as they are currently living in hotels. This means they are keen to move in immediately. The Cornelia Apartments are completing now and we have fully referenced tenants waiting to move into this building. A one bed apartment is typically achieving £340 per week, a premium over older buildings. Other developments in the area are also gaining popularity such as Colindale Gardens and we would be happy to receive instructions from any landlords with a property here too.
If you have a property to let in any of these areas, or would like a free no-obligation rental valuation of your property please contact us. For more London rental market news and updates, subscribe to our newsletter.
View all posts by Anita Mehra