Traditionally, early summer is a very busy period for the lettings industry and this year is proving to be no exception. Rental demand is high and in fact outstripping supply in many areas, particularly for apartments in the £400 – £600 per week price bracket. Of course this is good news for buy-to-let landlords who are seeing minimal void periods between tenancies, which is helping to increase their rental yield. Tenancy renewals also remain very high – generally between 60% and 90%, and we are finding that few tenants are moving on at the end of a tenancy unless they have a good reason to do so. This has left us with a big shortage of stock and a waiting list of would-be tenants.
The Tenant Fees Act has had an impact on the market too, with some tenants who have held back a move until the ban on fees came into force, now quickly looking to put down roots in the Capital. We are now waiting for a number of developments (or new phases) to launch. These include the final phase at Nine Elms Point Sw8, the Henley Apartments at Fulham Reach in Hammersmith and the Castleton and Celeste apartments at Beaufort Park in Colindale. As these buildings complete, stock shortages in these areas should ease a little – at least for now.
With competition strong and applicants often putting in multiple offers on different properties before they make a decision in the hope of getting a better deal, we would advise landlords to move quickly when an offer is made, negotiating if necessary in order to secure a tenant quickly. As ever, well-presented properties that are accurately priced are letting quickly.
It does pay to remember that some applicants prefer a brand new apartment and will pay a premium for this. So if your apartment is a little older, even just two or three years older and competing in the same development as brand new homes are being offered, make sure you refresh the décor at the end of the current tenancy to ensure it looks its best. Also recognise that the asking rent will be a little lower than for brand new apartments in the same development.
If your rental apartment is coming back onto the market soon, perhaps having been let continuously for two or three years, call your local Benham and Reeves branch to discuss current market conditions and request an up-to-date rental valuation.
Rental demand in the City and East London remains strong and we saw a further upturn in business after the introduction of the Tenant Fees Act, as some tenants had been delaying their move until after the Act was introduced on June 1st in order to reduce their costs. Now that is out of the way, we are seeing an increase in demand and enquiry levels are buoyant. Stock levels remain fairly low though so we are keen to talk to landlords with new apartments to let as we have applicants waiting to move into homes across East London. Tenants’ budgets remain good, with apartments priced at up to £650 per week letting well.
It will come as no surprise to hear that most applicants are looking for good facilities – the most popular of these being a concierge and a gym/pool which are now very much the ‘norm’ in newer developments. Apartments in Canary Wharf are often a good option for cost-conscious young professionals – within easy reach of Canary Wharf are Royal Wharf in E16 and Upton Gardens in E13 – both developments offer a high standard of accommodation and excellent amenities yet at rents which start at £300 per week for a one bed and £375 per week for a two bed apartment. Rental demand in both these developments is really starting to pick up now as they become more well known. In Surrey Quays, at Marine Wharf, one bed apartments are achieving upwards of £350 per week and for two beds £425 per week, again very affordable, particularly for younger professionals. In Greenwich rental demand remains high too, and again the area’s affordability is a key factor – here rents start at £300 per week for a one bed and £390 per week for a two bed flat.
Of course, rents for a similar standard of accommodation increase the closer you get to the City. In Wapping a one bed apartment in London Dock will rent for upwards of £535 per week while a two bed will achieve upwards of £700 per week. Applicants looking to live in the City itself tend to be senior executives so clearly have much higher budgets and therefore luxurious buildings such as Blackfriars Circus and One Blackfriars remain extremely popular. Generally, applicants have good accommodation budgets but value for money is always a priority and of course, the higher the budget, the higher the tenant’s expectations.
Shortages of stock remain a problem at a number of West London residential developments such as Dickens Yard in Ealing, Kew Bridge in Brentford and Imperial Wharf/Chelsea Creek in Fulham. Our Dickens Yard and Kew Bridge branches are receiving high levels of enquiries but simply do not have enough stock to meet the demand. Tenancy renewals are running at over 90%, adding to the shortage. As a result, apartments are letting as soon as they come onto the market, achieving full asking rental and in fact, we usually have waiting lists of fully referenced tenants waiting for the next property to become available. At one point recently we had just four apartments available for rent at Dickens Yard. We are therefore very keen to talk to landlords wishing to let their properties in Ealing and West London generally. Lack of stock is also an issue at Fulham Reach in Hammersmith, with demand extremely high and apartments letting within a week at most. 60% – 70% of existing tenants are renewing their tenancy agreements at the moment. Apartments priced up to £1000 per week are the most popular and generally are achieving full asking rental. The shortage of properties should improve when the new Henley Apartments start to complete in late July.
Our central London branches in Kensington, Knightsbridge and Hyde Park are seeing demand pick up considerably, with accurately priced one and two bed properties in particular letting quickly. Both furnished and unfurnished properties are sought-after. Typically one bed properties are achieving £475 – £550 per week and two beds £575 – £700 per week. We are also now seeing more families looking for larger three bed homes for £700 – £750 per week. The last phase of Nine Elms Point, Gladwin Tower, in Vauxhall, is attracting a lot of interest and we are taking on a lot of new instructions here, over 30 to date, all of which have let immediately. Across the development the market is strongest for one bed apartments and three bed units which are popular with both families and professional sharers. Most applicants are happy to wait for their preferred property in a particular development, even if that means a delay – we recently had an offer accepted on a three bed apartment in Vista, Chelsea Bridge and the applicant was happy to wait until August before moving in because this was the only development he wished to live in. Last year this property let for £1000 per week and during the new tenancy the rent will be £1200 per week. And there will only be a three day turnaround between tenancies, which of course is excellent news for the landlord.
Our Beaufort Park branch in Colindale is extremely busy, experiencing exceptionally high demand for apartments in the recently released Celeste and Castleton Apartments where one beds are achieving £1300 – £1400 per month and two beds are achieving £1700 – £1800 per month. All sizes of apartment – studios, one, two and three beds – are seeing this same high demand. Most tenants are renewing their existing tenancies and on average tend to stay in the same apartment for at least two years. In Hampstead and Highgate, we are starting to see more stock coming onto the market and there has also been an increase in demand, again some of which can be attributed to the bounce back after the introduction of the Tenants Fees Act. With demand increasing noticeably, rents are stable and one and two bed apartments are letting well, with one beds achieving £350 – £450 per week, with two beds achieving £400 – £500 per week. Refurbished period conversions that are accurately priced usually let most quickly while new builds just fly out – Beaufort Court and Argo House, both in NW6, being among the most popular. We are also now starting to see families starting to look for larger properties ahead of the start of the September school term – typically for three bed homes priced at £700 – £800 per week.
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