The London Rental Market – August Update

The London property market, particularly the rental market, can slow down a little over the summer as applicants prioritise their annual holiday or simply enjoying the sunshine over looking for a new rental property. But this summer, rental demand in London remains good and we’re seeing plenty of enquiries across our 11 London rental offices. Enquiries from corporate relocation agents are strong, particularly for families looking for homes ahead of the start of the new school term in September. We are also receiving high numbers of enquiries from students and from recent graduates moving to London for the first time as they start out in their career.

Central London

Knightsbridge and Chelsea are enjoying strong rental demand and we’re receiving good offers for properties. We’re seeing an increase in enquiries from corporate relocation agents, primarily searching on behalf of US finance executives. For these applicants, the priority is being close to the school they have chosen for their children – usually they’ll find a good school first and then look for a property nearby. They tend to be looking for four bedrooms with plenty of space (at least 2,000 sq ft) and are happy to consider both lateral apartments and houses but the property must be finished to a high spec.

Budgets remain uppermost in applicants’ minds which explains why we’re continuing to see increasing numbers of professional sharers getting together to reduce their accommodation costs. They usually opt for two bedroom, two bathroom properties

The student market is also busy and generally, students are thinking ahead more than in previous years, looking to secure a property early rather than wait until the last minute when there is less choice.

Generally, both sales and rental markets have performed well over the last few years and this has sometimes led landlords to believe that rents should be rising at a similar rate to sales prices. However, with sales prices fluctuating more, landlords are becoming more realistic about the property market generally. They’re realising that with the high cost of living in London, many tenants have firm budgets which they cannot exceed so landlords must be more measured in their expectations.

City, Canary Wharf, Docklands and Greenwich

Rental demand in the City, Docklands and Canary Wharf is as buoyant as ever. We’ve been busy finding homes for students since late June and this is continuing through July and into August. Generally, students are looking to secure rental accommodation several weeks earlier than they did last year while there is still a good choice at sensible prices. Most have discovered that waiting until the last minute in September can mean a shortage of good properties and inflated rents. Many are choosing to share accommodation so they can split the rent two or three ways. We’re also seeing an influx of recent graduates starting new jobs in the City.

In terms of location, the Square Mile, in particular the Barbican, Bishopsgate and Liverpool Street are popular and properties are letting quickly. Applicants want to be within walking distance of work, close to amenities like supermarkets and ideally with facilities such as a gym. Typical rental prices at the moment are £350-£450 per week for a one bed apartment and £475-£650 per week for a two bed. Such is the demand that we recently let three new, one bed apartments in a period conversion in Wormwood Street within days of marketing them. We’ve also had a huge response to a number of new apartments we have in The Heron, EC2.

Over in south east London, demand also remains high for the area’s new residential developments such as New Capital Quay, Marine Wharf and Maple Quay in Canada Water. Demand here just goes from strength to strength.

North/North West London

The rental market is brisk in Hampstead. The relocation market has stepped up a gear and there’s been a notable increase in activity. Demand is strong from US executives in particular and we also have high numbers of French families looking for homes in the areas around Mansfield Road and South End Green, close to the College Francais Bilingue de Londres. While there is high demand for larger properties (£1000pw+) and we’re concluding plenty of tenancies, budgets are lower.

A noticeable trend we’re seeing is that, with sales prices so high, people who have sold their property, particularly in the mid to upper price brackets, are now choosing to rent rather than buy for the time being as they’re unable to find a new property in their price range. More stringent requirements by mortgage lenders are also impacting on the sales market and this is having quite an effect on the local rental market, increasing demand for larger properties.

Two bedroom apartments are also letting quickly and we have a shortage of these at the moment. We would also like to take on more properties owned by landlords willing to accept a dog, particularly properties with outside space near the Heath. Many applicants with dogs move to Hampstead specifically to be near the Heath so there’s huge demand for dog-friendly landlords who will usually find their property lets more quickly as a result.