London Rental Market – November 2015

Our London lettings branches have had a very busy few weeks, with properties, particularly smaller one and two bedroom units, letting quickly in most areas. New developments continue to attract a lot of enquiries from tenants who like the high spec and amenities they offer. For many tenants, renting is now a positive lifestyle choice, offering them a better standard of property than they could afford to buy. As these young professionals tend to be a more mobile workforce, it is a much more flexible option which better suits their working lives and this in part explains the strength of rental demand in London.

City, Canary Wharf, Docklands and East London

Rental demand in the City and Canary Wharf remains very strong – properties are letting quickly and thanks to the good supply of new developments in East London, we have good stocks. The lettings market has been performing well this year with positive trends for landlords and tenants. Landlords have seen rent increases of 3 – 5% compared to last year. Tenants meanwhile are often choosing to commit to two or three year tenancies, saving them the hassle of renegotiating their rent after just one year. A longer tenancy is clearly good news for landlords as it eliminates the risk of void periods. Tenancy renewals are around 65%, up 10% on this time last year.

Greenwich continues to experience high rental demand and we’re seeing an increase in the number of enquiries we are receiving from tenants. Among the most popular developments in Greenwich at the moment are Uberhaus, New Capital Quay, Paynes and Borthwick and Hilton Wharf. As interest in new residential developments in East London soars, our new Wapping office is also receiving plenty of enquiries, both from landlords planning to invest in property here and from tenants looking for a new home in this part of East London.

Central and West London

Our Hyde Park office has had an extremely hectic few weeks, with high numbers of enquiries and properties letting very quickly, usually on the first viewing. There have even been some situations where we have seen a bidding war on some apartments, so high has been the demand. The rental market has steadied a little now, although we are still very busy with enquiries from corporate tenants and relocation agents. Many young overseas professionals are relocating to London from countries such as Australia, Germany, Holland, the US and Japan.

For many corporate tenants, the new developments of Paddington Basin are particularly sought-after – 3 Merchant Square is one of the most popular. But we’re also seeing an increase in demand for traditional period conversions in areas such as Bayswater. Many overseas applicants, particularly the Japanese, love the prestige of a grand, period property, although the interior has to be contemporary and finished to an ultra high standard.

Our Knightsbridge office has had a good third quarter to the year and has been very busy with the seasonal autumn surge of applicants, achieving good rents for landlords.   Properties are letting well and, while landlords should be prepared to negotiate in order to secure a good tenant, we are optimistic that the rental market will remain buoyant.  In Kensington, one bedroom apartments are continuing to let quickly and rental demand remains strong. The market for larger properties continues to be slower. Again, we are advising landlords to negotiate to secure a tenant and minimise void periods.

The popularity of new developments continues to climb and Fulham Reach in Hammersmith is no exception. Our new lettings office here is receiving high numbers of enquiries from applicants and properties are letting extremely quickly. With limited stock, competition amongst applicants is strong. Another incredibly popular development is Imperial Wharf and again, we are very busy here, particularly with enquiries for one and two bed apartments, ideally with a river view – these apartments usually let straight away. Larger three bedroom apartments are also very popular at the moment. Applicants have good budgets and are happy to pay close to asking rent as they love the facilities, the high spec and the riverside location that Imperial Wharf offers. And in West London, the story is similar with good demand for one and two bedroom apartments at developments such as Dickens Yard in Ealing and Kew Bridge in Brentford, but there is also a lot of interest in high end properties – two and three bedroom apartments and elite specification properties which are letting to senior corporate tenants, many from overseas.

North West London

One and two bedroom rental properties are in high demand in Hampstead at the moment and are achieving closer to asking rental than larger properties for which demand is slower. So far, 2015 has been an excellent year for us and the first two quarters were, in fact, our most successful ever. Since then the market has slowed a little and the seasonal September ‘flurry’ was quieter than usual – I understand other agents locally have also experienced this.

With demand for family properties down and stiff competition throughout the rental market, landlords are usually willing to negotiate to attract a good tenant. Generally tenants seem to be less inclined to move, mainly because landlords are being realistic in their rent increases which usually increase in line with RPI and this has been low over the last couple of years. Renewing their tenancy also saves tenants the cost and hassle of moving.

Smaller rental properties in Highgate are most sought-after at the moment and there is plenty of interest in these. After a busy few weeks, the rental market has quietened a little, particularly for larger family homes. After this busy period, we do have a shortage of properties across the board so are welcoming enquiries from landlords with a property to rent in Highgate.

Our Beaufort Park office has been very busy handling enquiries from young professionals and here too we are seeing shortages of properties, particularly one and two bedroom apartments which are being snapped up by applicants as soon as they come onto the market.

If you would like more information about the London rental market please contact one of our friendly negotiators here.