There is a growing feeling of optimism in the London rental market as enquiry levels have continued to increase significantly over the last few weeks as the UK continues to open up post-lockdown. Much of this is thanks to the UK’s extremely successful vaccination programme which is driving forward the re-opening of businesses and the economy generally.
After a year of restrictions, pent-up demand from London’s professionals is evident and we are seeing more applicants looking for a new rental property and committing to a move as soon as they find the right home. Their requirements are often different now as they perhaps adapt to a change in circumstances and the rental landscape in London is definitely changing.
As we’ve mentioned before, a larger home, perhaps with a second bedroom to use as a home office, outside space or proximity to a park are now priorities for many tenants. Of course, a landlord cannot change the location or size of their property, but if you own a one bedroom property for example, it may be worth considering creating a study area with a desk and storage in a corner of a living space to show potential tenants that it is possible to work from home comfortably.
In areas such as Hampstead and Highgate, garden flats are in high demand and are letting more quickly than properties without outside space. So rents on apartments with a garden or terrace are holding up well compared to properties that don’t have this access.
Another interesting trend is the growing demand for properties whose landlords will accept pets. Lockdown saw a dramatic increase in the number of people owning both cats and dogs so landlords who wish to ensure their property lets quickly should be prepared to welcome a tenant’s furry friend too!
Oversupply of rental properties in London now starting to reduce
Since the first lockdown, London’s lettings market has seen an oversupply of properties leading to applicants negotiating to reduce their rent.
Many professionals left the capital to return to their home towns, both in the UK and overseas, handing back their leases early. And as tourism ground to a halt, leaving many Airbnb and other short-term let properties vacant for months, landlords flooded the long-term rental market with their properties as they looked for other ways to find a tenant.
This situation is gradually changing. With hospitality and tourist attractions opening up again, many UK citizens are choosing to take a staycation this year. So this flood of short-let properties in London is diminishing, reducing the overall supply of rental properties and rebalancing supply and demand. As a result, rental values are starting to stabilise.
While applicants are understandably keen to negotiate on rent, they are now making much more sensible offers, aware that the current situation in terms of oversupply will not last much longer as stock levels reduce and competition for properties becomes stronger.
Demand from overseas professionals picks up
Many of the areas of London covered by our eighteen London lettings branches are also seeing the return of enquiries from relocation agents and overseas professionals who are actively considering a return to their London life. This is a gradual process but enquiries are building and we expect demand to increase over the next few months.
Many of these professionals love the look and feel of a brand new apartment and there are several developments or new phases of existing developments completing at the moment.
New residential developments completing soon
These new developments are tempting renters with their high spec and amenities. Close to the City in Canary Wharf, One Park Drive is attracting a lot of interest and we are letting the first apartments here. We are receiving enquiries for the latest phase at South Quay Plaza (E14) and also at Landmark Pinnacle, close to Canary Wharf. Cashmere Wharf, the latest phase at London Dock, is due to start completing later in the summer and we are already receiving enquiries for apartments here.
In North London, apartments at the two latest buildings to complete at Beaufort Park in Colindale (Fairbank House and Fairmont House) are letting very well. Generally two bed apartments are letting most quickly at the moment, many to BNO passport holders from Hong Kong who are moving to London for the first time. Rents are holding up well at this ever popular development and we are also continuing to see good demand from overseas professionals – from Japan, China and South East Asia generally as well as the US and Europe. With shops, restaurants and cafes now open there is a real buzz here again. We are also starting to receive enquiries from international students planning to return to their universities in September/October.
Our Dickens Yard (Ealing) and Kew Bridge branches are both very busy, with high numbers of enquiries from UK professionals and increasingly from overseas professionals too. Many apartments are once again achieving full asking rental or close. The uptick in demand has been really noticeable over the last month or so as businesses return to full operation and applicants feel ready to commit to a new home and perhaps a fresh start. The Green Quarter in Southall has been exceptionally popular and we are eagerly waiting for the next phase to complete in late June.
Japanese corporates return to London
We’ve seen a sharp rise in rental demand from Japanese corporate tenants over the last month and in fact our Japan Desk has just had its best month ever in terms of the number of transactions completed. The level of enquiries we are seeing is mainly due to word-of-mouth recommendation.
It seems that the UK’s current success in combatting Covid 19 is having a positive effect on the attitude of Japanese professionals and their families who are considering a move here and Japanese expats are proving keen to move to London and resume career plans that have been put on hold over the last year.
White City Living in West London remains a very popular development and we have been securing a number oftenancies for Japanese professionals there. Dickens Yard in Ealing also remains highly sought-after, as does Filmworks, also in West London, and we have already agreed several deals here. In East London, 250 City Road in Shoreditch has also quickly become a sought-after development.
International students planning their move to London for the autumn term
Many of our branches are starting to see enquiries coming in from international students who are planning to return to their universities in the autumn. We will keep you updated as progress continues.
Ensuring your rental property lets quickly
For many investors who bought an investment property off-plan and completed the purchase recently, the last year has been difficult. The rental market has been incredibly competitive and landlords have had to steer their way through one of the most challenging periods any of us have ever seen. The advice and support of an experienced letting agent has been vital.
One of our strengths is that, as well as being sales agents, we have over 60+ years’ experience in the London lettings industry, so we can offer expert advice on letting and managing your property too. Few London estate agents can offer this comprehensive level of support. We offer a complete property investment package:
So all our landlords’ needs are met under one roof – a service that a sales agent alone simply cannot provide.
If you own a rental property in London, contact your local Benham and Reeves branch for a free rental valuation. With eighteen lettings branches across the capital and our international offices at your service, we can give up-to-date, accurate advice on rental demand in your local area.
View all posts by Anita Mehra