The growing number of Londoners returning to the Capital after the pandemic is continuing to exacerbate the shortage of rental properties in London. Londoners who moved away from London during the lockdowns, have been steadily making a return to the office, so demand for well-presented homes to rent in popular locations is at an all-time high, growing way beyond the current supply of rental properties available.
Many professionals are once again craving the vibrant city lifestyle and normality they have missed over the last couple of years so finding a new home in the Capital is now a priority. As a result, property shortages remain a key issue for letting agents. This continued shortage of stock is frustrating for us as we could let our properties many times over, so high is the demand. Across our nineteen London branches, we saw a 27% increase in new applicants registering with us compared to March with some of our lettings teams working extra hard to finalise new tenancies before the Easter break.
We have also been processing a huge number of renewals, where existing tenants are choosing to stay in their current property. Of course, there is a positive for Landlords; the continuity of tenant and dedicated income that renewals can provide is welcomed, but this is further exacerbating current property shortages.
If you have a property in London becoming available to let soon, please contact your nearest Benham and Reeves branch where one of our lettings team are on hand to help you with latest market rents achievable.
As we currently have waiting lists of fully referenced tenants looking to move into new homes as soon as they become available, most of our rental stock is letting after just a couple of viewings. And many of the latest property instructions in large new developments like Beaufort Park in Colindale, are not even advertised on our website as we can offer them to good quality tenants who we have already qualified for renting.
Properties that do reach our website are usually let within a day or two at most – and in some cases perhaps just half an hour! Just a phone call to an applicant we are already in contact with will ensure the property will be let almost immediately, often without a physical viewing taking place. These applicants have already been primed to understand the process and will wire a holding deposit before the phone call ends, especially if they have a specific apartment floor/aspect in mind.
This is where our new-build specialism comes into its own as our lettings teams make sure they know their local property stock which avoids delays and disappointments. Some applicants may have previously missed out on properties as they didn’t make a decision or agree a tenancy quickly enough. So now they may sign a new tenancy simply on the basis of a video tour, acting as quickly as possible so that they don’t miss out again.
Before the pandemic, the lifecycle of a tenancy might involve a tenant typically renting a property for 12 months and then perhaps renewing for another year, before moving on. They might move on because they are changing jobs or they might just like to live in a different area of London. Moving to a new rental property wasn’t a major decision. Since the pandemic, tenants tend not to move just because they would like a change of scene. They are now often choosing to renew their tenancies and remain where they are, as they realise that there are so few properties to choose from. And because rents have risen sharply since the pandemic, they know they are unlikely to find an equivalent property at a similar rent. So a good proportion of tenants are renewing their leases and staying put, usually moving only due to a change of circumstances.
We expect this trend to continue this year due to housing shortages and tighter financial conditions for consumers but remain hopeful that 2023 will see a more typical tenancy lifecycle and more movement in the market.
In Highgate, Hampstead and Dartmouth Park where we have had branches for decades, rental properties are letting within a couple of days, often after just one viewing. Some overseas executives are prepared to sign a tenancy just on the basis of a video tour, to avoid missing out on a good property. Ideally, they would like to view the property in person but they will go ahead without doing so, rather than lose out. We currently have no supply at all in Dartmouth Park. This is a frenetic market and our lettings teams have never seen such a crazy market with the supply of property to rent at its lowest in 20+ years.
The second phase of Clarendon in Hornsey will be completing from June and we expect to receive a number of new instructions at the development so this should fulfil tenant demand a little but applicants are already registering with us for flats here. We’ve also received some new instructions at Berkeley’s Woodberry Park scheme – we’ve just let one apartment within just half an hour of it going live on our website.
As mentioned earlier, at Beaufort Park in Colindale, demand is also extremely high, both from local and from overseas professionals relocating here, particularly from Hong Kong as they want to be part of the thriving new Chinese community that is growing here. New apartments have been coming to market at Finlay House, the latest building to complete and these are letting immediately and waiting lists of fully referenced tenants hoping to snap up the next available apartment.
Our City and East London branches continue to see demand outstrip supply but there are some signs of a little more movement in the rental market. Some current tenants are now starting to move on, perhaps with a career move to a new area, but there are many more professionals relocating to London’s financial district taking their place so turnover is fast. We’re seeing a real mix of professionals moving in here with a surge of enquiries recently from IT and Fintech (Financial Technology) professionals. Well-presented apartments priced in the £1,600 – £2,700 per calendar month price bracket are the most popular and are letting within a few days of being marketed.
We attribute this surge in demand largely to the number of new tech companies that are now incorporated in the UK which jumped 94 per cent last year. A total of 18,549 tech businesses were incorporated in London in 2021, according to an analysis of data held by Companies House, up from 9,572 in 2020. Throughout the pandemic, businesses and individuals had to adapt and embrace technology, both to operate successfully during periods of disruption and to adapt to the rapidly changing consumer demands. The UK’s digital industry is now worth more than double Germany’s equivalent, its closest European rival. This is good news for landlords who will benefit from letting their properties to this growing industry who typically have good budgets.
Our Shoreditch branch is very busy assisting Japanese families relocating to London. Our Japan Desk, which is located here has never been busier, placing new tenants in lots new homes across different property developments, with 250 City Road and Fulham Reach Hammersmith, the two most popular destinations.
In East London where we are highly active, there are a couple of new residential developments completing now that should ease supply issues a little. The new phase at London Dock Wapping – Merino Wharf is now completing, with rents from £2,200 – £2,300 per calendar month for a Manhattan Studio apartment and £2,750 – £3,000 for a one bed apartment. In East Ham E6, new homes to rent at New Market Place will be completing soon and it already attracting a lot of interest. A one bed apartment will be available to rent for £1,350 – £1,450 per calendar month and a two bed for £1,600 – £1,750 per calendar month. With some of our international clients having purchased apartments here, we are keen to conclude successful lets as soon as the first homes become available.
We have waiting lists of applicants for residential developments in many Zone 1 Tube fare locations, and many apartments have offers and tenancies agreed in 1-3 days due. Typically, applicants are prepared to wait until a property in a particular building becomes available, perhaps living in short let accommodation until the flat becomes vacant. Increasingly, applicants will have a game plan in place already as they know they have to be extremely organised and pro-active in order to secure their chosen property in this highly competitive market.
Prospect Place, the latest building at Battersea Power Station is completing soon and will have several apartment instructions coming on to our books but expect these to let very quickly. Flats at DAMAC Tower and 9 Millbank SW1 are also letting quickly, with pre-vetted applicants.
An interesting shift in the Nine Elms area, which is also in Zone 1, is that international students are making enquiries now for apartments that will not be available until Autumn, when their university term starts. As they know that availability is so limited, they are taking the initiative to get themselves in the best possible position to get a property when available.
Our lettings team are also seeing demand outstrip supply at both White City Living and Television Centre, Shepherd’s Bush’s iconic and highly sought-after residential developments. Rents can be on the higher side here due to the high specification and location of these Berkeley schemes but this has not deterred tenants looking for smaller units.
The last few weeks have continued to see rental demand increase across our five branches here so stocks levels are limited, most acutely, we are very short of stock in popular residential developments like Dickens Yard in Ealing and Kew Bridge in Brentford. We also have waiting lists of applicants for apartments at two brand new developments completing soon – Western Circus in Acton and Grand Union on the Wembley Borders. Demand is also high at The Green Quarter in Southall which is a brand new rental hotspot for professionals looking for a high spec apartment on the fringes of west London, with its own Crossrail station coming soon.
Some recent new instructions at Fulham Reach in Hammersmith to Japanese tenants have been letting very quickly and stocks here are once again very limited. Typically any new flats that become available let within a couple of days.
With such low stock levels, this is a good time to revalue your rental property and ensure you are getting optimum rental. For a free, no obligation valuation, contact your nearest Benham and Reeves branch.
View all posts by Anita Mehra