We’ve talked a lot recently about the growing shortage of good rental stock in London. A major factor contributing to this is that tenancy renewals are at a high at the moment so stock is simply not coming back onto the market. In some areas, renewals are running at 90%! But why? A few years ago, a tenant might have moved to a new rental property simply because they fancied a change of scene. Today though, budgets are uppermost in most renters’ minds, as is the current political and therefore economic uncertainty, so stability and reducing costs are now priorities.
We’re finding that, towards the end of a tenancy, most tenants now contact us, wishing to negotiate with the landlord and agree a new deal. And there are real advantages in this for both parties.
For landlords, there is a huge benefit in maintaining continuity of income and eliminating any void – even a short void can cost thousands in lost rent. And with rents fairly static across London, there is little to gain in holding out for a higher rent that probably won’t materialise. The cost of any void will almost certainly outweigh any gain. There are also direct cost savings – most notably there are reduced fees for renewing a tenancy (rather than having to find and reference a new tenant) and reduced costs usually associated with reletting a property such as decoration, replacing worn furnishings and deep cleaning. And of course, you cannot underestimate the importance of holding on to a tenant who looks after your property and pays their rent on time.
For tenants too, moving home is no longer a priority once they have found a home and an area they like. Who would choose to incur the cost and hassle of moving once you have found your ‘dream home’?
But if your tenant is moving on, perhaps because they are moving job, then finding a new tenant quickly is vital. Call your local lettings branch to find out how we can help.
Our West London branches – Fulham Reach, Imperial Wharf, Ealing and Kew Bridge – are all experiencing high demand at the moment.
At Fulham Reach in Hammersmith, we are struggling for stock. We have let all our available properties at Sovereign Court and are waiting for some tenants to vacate in March/April. Although around 70% of tenants are choosing to renew. All our properties are fully let at Fulham Reach too and we are looking forward to receiving new instructions when the latest phase, the Henley Apartments, launches in the summer. This will have only two and three bed apartments though. As a result of the lack of stock, apartments are letting on first viewing, or even before a viewing takes place. Dickens Yard in Ealing and Kew Bridge in Brentford are seeing strong demand too and one bed apartments in particular are in very high demand – these are letting instantly. In both developments around 90% of tenants are renewing. We have a very few apartments left at Dickens’ Yard’s new building Quartz House and our Kew Bridge has limited stocks but is busy handling enquiries for the latest phase at Queenshurst Square in Kingston. We are also receiving instructions a little further afield at Harrow Square when the next phase launches soon.
After a quiet few weeks in central London, rental demand around Hyde Park, Knightsbridge and Kensington is picking up again. We have good stock levels and accurately priced, well presented properties are letting well, particularly to applicants relocating from the US, Australia, Italy, France and Germany. The areas bordering Hyde Park itself are extremely sought-after. Tenancy renewals remain at a very high level – around 90% of tenants are renewing their existing tenancy.
This is still a difficult market though – applicants are knowledgeable and compare rents, expecting to do a deal with landlords, so flexibility is key to ensuring a property lets quickly. Many also request a six month break clause in their lease in case their personal circumstances change.
With new developments setting the bar so high in terms of presentation, another important consideration for landlords with older properties is refurbishment. Properties should be updated to a high spec to appeal to tenants increasingly used to showhome standards.
Rental demand at Nine Elms continues to go from strength to strength and properties usually let within one or two viewings at most. In fact, we are even letting apartments in advance before the previous tenancy ends, so the new tenant can move in immediately. And of course, most tenants renew their existing tenancy – the only ones vacating are those who are moving away.
The City and East London
Properties in the City and east London continue to let quickly, particularly those priced up to £750 per week. And with tenancy renewals still running at over 60%, reducing the number of properties coming back onto the market, we are seeing shortages of rental stock, particularly one bed properties priced up to £550 per week.
The lack of this type of rental stock in the City is pushing many younger professionals to move east towards Canary Wharf where there is a greater choice of good quality rental
properties at affordable price points such as the recently launched Liberty Tower in E14, as well as Perilla Tower at Goodman Fields which is being handled by our City and Wapping branches. Another exciting new development generating a lot of interest is London Square Spitalfields where one bed apartments are achieving upwards of £550 per week and two beds upwards of £725 per week. Our Wapping branch is also looking forward to the launch of Cashmere Wharf at London Dock which is expected over the summer. Our Surrey Quays branch is now receiving new instructions at Marine Wharf East, where apartments are letting quickly, mainly to young professionals working in the City. And over in South East London, the Kidbrooke Village remains very popular – the latest phase, Hopgood Tower, is launching now, with one beds achieving £340+ per week.
At the upper end of the market, we have new stocks of two bed/two bathroom properties priced at £750/£800 per week coming to the market – these are popular with senior executives as well as professional sharers. At this price point sharers can find a high spec property with good amenities which would be beyond their budget if they were to rent alone.
Our Hampstead and Highgate branches have a shortage of rental properties at the moment, particularly one and two bed apartments, so accurately priced flats are letting quickly but presentation must be immaculate. Applicants are savvy though – they research the market and compare properties in detail, shopping around to find the right property at the right price. Many are looking to reduce costs so negotiate hard to get a good deal and increasingly, they are requesting a break clause at six months in case their job situation changes. We would therefore recommend landlords be prepared to be flexible in order to secure a tenant quickly. New developments close to the area are setting the bar high in terms of décor and presentation so we would recommend landlords consider a refurbishment if their property has not been decorated for a while. Refurbished properties always let more quickly so the cost usually pays for itself pretty quickly.
In Colindale, our Beaufort Park branch is very busy – apartments are letting quickly, usually for the full asking rental and we have good stocks to meet the high demand. We are receiving a lot of enquiries from relocation agents and professionals working for some of the large tech companies moving to north London at the moment. Being close to the Northern line means it is an easy commute into Kings Cross and nearby areas where many of these companies now have headquarters. The availability of parking is also an important issue, with most applicants requesting an apartment with its own, private parking space. Tenancy renewal levels are very high, around 80% of current tenants are renewing, illustrating how popular the development has now become.
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