A welcome spell of warm weather has brought a sense of optimism to the London rental market, with our 16 lettings branches seeing enquiry levels really bounce back after the Easter holidays. Rental demand across most of London is strong once again and in some areas, notably parts of east London, demand is outstripping supply at the moment, despite the number of new properties coming onto the market.
Historically, the London rental market is resilient and withstands seasonal fluctuations well. Business confidence remains strong. While London has traditionally been a finance and business hub, we are also seeing newer industries moving here such as advertising, music and life sciences. In fact, creative and tech industries took more office space during the last quarter than finance companies. These companies relocating to London have to find homes for their executives and we play a key role in this – over the last year we have let property with a total value of £1.75 billion!
Rental transactions were up by 31% in 2017 over 2016 and while we will always see fluctuations in demand, the overall trend is for demand to increase. The Capital’s population is expected to increase by a further 37% over the next 30 years while research by Price Waterhouse Coopers reports that 60% of Londoners will be renting a property by the year 2025, indicating that long-term renting will be the future for younger Londoners in particular.
So at the moment, there is a definite upward trend in rental demand, although market conditions remain competitive. Pricing remains key as many applicants have reached a ceiling in what they can afford to pay for rental accommodation but there is a strong corporate market. Many come with generous budgets and we are well placed to help them. However, they also recognise that, with more new property developments launching at the moment, they have plenty of choice and are in a strong negotiating position.
Of course, many factors affect a property’s potential asking rental – location, specification, even layout and presentation plus transport links and amenities. Seasonal fluctuations and local demand also have an impact, even from week to week. To get an accurate rental valuation for your property, talk to one of our branch managers, they are experienced and will be realistic about what you can expect.
The first quarter of 2018 has been very positive with good demand. Applicants, both from the UK and overseas, continue to move jobs and home so the market is buoyant, although it remains price sensitive. Properties must be accurately priced to let quickly, with those priced at up to £600 per week renting quickest. As well as value for money, applicants are prioritising the specification and location of a property and with several property developments launching at the moment, they have plenty of choice. More recently we are being asked about cycle storage and broadband speeds. We are also being asked about energy efficiency. Pretty much all of the new build schemes are good at meeting these modern demands. Some apartments have been the subject of a bidding ‘war’ between applicants as a result.
Rental demand is strong in the City and Wapping and we are looking forward to several new developments launching soon. In the City rents in new developments are typically upwards of £450 per week for a Manhattan apartment, £475+ per week for one bed apartment and £600+ per week for a two bed apartment. These developments usually have a 24-hour concierge, swimming pool and gym – all ‘must haves’ for most City professionals.
Nearby, brand new apartments to the east of Canary Wharf are starting at around £290 per week for a one bed apartment and £390 per week for a two bed apartment – very keen price points. New developments in Greenwich will also be launching soon and we expect these to be popular as they have excellent facilities as well as being close to a DLR station. With little availability now at Marine Wharf Surrey Quays, despite continuing demand from tenants, we would like to talk to landlords about new instructions here as it’s always popular.
With a continuing emphasis on reducing accommodation costs, increasing numbers of tenants, around 65%, are renewing their existing tenancy agreements, only moving home for a good reason, whether relocating, upsizing or downsizing – few are moving home simply because they want a change. For the same reason, we see increasing numbers of young professionals sharing an apartment to reduce costs and these will probably opt for a two bedroom, two bathroom property.
The last few weeks have seen rental demand pick up at our Knightsbridge, Kensington and Hyde Park branches, despite a challenging rental market generally across central London. There is strong competition at all price points and properties must be immaculately presented and accurately priced in order to let quickly. Affordable one bed apartments priced at £400-£450 per week are in highest demand in these areas and these are letting well, typically to young professionals. With a wide choice of rental homes available, tenants are aware of their strong negotiating position and may offer on several properties before deciding which to rent. Equally, most have strict budgets and affordability is a key issue, so frequently an applicant’s offer will be at the top of their budget – landlords should be mindful of these constraints when negotiating and recognise that many applicants are reaching their limits in terms of what they can afford to pay for rental accommodation. Our central London branches have been receiving quite a few new instructions recently, for one, two and three bed apartments as well as some four bed townhouses in Knightsbridge. Generally stocks are good and with plenty of availability as demand continues to grow, the outlook is positive for the summer months.
South of the river, the popularity of Nine Elms Point in Vauxhall continues to grow and we are seeing increasing numbers of enquiries from applicants, both for Nine Elms Point where our branch is situated on-site and other local property developments such as Kewbridge, Battersea Power Station and Embassy Gardens. Rental demand for all these developments is strong, with properties usually letting within two or three viewings at market rentals.
Smart, residential developments in West London continue to attract applicants looking for a high standard of rental accommodation, often with beautiful outside space and excellent amenities, from Imperial Wharf and Chelsea Creek on the borders of central London to Dickens Yard in Ealing and Kew Bridge in Brentford. Our Dickens Yard branch remains busy finding homes for Japanese corporate clients moving to London for the first time, taking over from executives just finishing their London secondment. We have a dedicated Japan desk, managed by Yoshi Tsuji, in order to help clients with their move to the UK and many are reporting to us how useful this service is to them. These applicants have good accommodation budgets and are looking for high spec homes in an area which is quieter than many central London locations. We are also seeing increasing numbers of Japanese clients wishing to live at Kew Bridge although we would like more stock at the development to meet this growing need so are looking for new instructions.
Our Fulham Reach branch in Hammersmith has been busy handling the launch of two new buildings at Sovereign Court – Lancaster House and Marquis House. Most units at Lancaster House have now been let and only a few remain. Apartments at Marquis House are now completing and we are letting them almost as soon as they become available. We are gradually receiving new stocks and with asking rents of upwards of £550 per week for a two bed, two bathroom apartment, these offer excellent value for tenants wishing to live within a short commute of central London.
Rental demand is strong at Beaufort Park in Colindale and the recent launch of Argent House (previously known as Sterling House) has been very successful. We have been receiving a lot of new instructions here and applicants are paying full asking rental for these brand new properties – Manhattan apartments are achieving £300 per week, one bed apartments achieving £335 a week and two beds apartments achieving £420 per week. We have fully referenced tenants waiting to rent apartments there before landlords have even received the keys, such is their popularity. Generally demand is buoyant across the development and we have been receiving letting enquiries from students (a lot earlier than usual) and relocation agents, many of whom are searching for homes on behalf of Japanese corporate clients, particularly banks. Beaufort Park’s high spec apartments are the type of accommodation Japanese applicants prefer and they also like the development’s extensive amenities and safe environment.
The rental market is really picking up in Hampstead and Highgate and there has been a noticeable upturn in enquiries, with the fine spring weather prompting families to start their rental property search in plenty of time for the start of the school term in September. Demand is increasing for three and four bed homes in particular. With a wide choice of rental properties available, applicants demand good value for money across all price points and types of property and expect to negotiate with landlords to get a good deal.
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