The London rental market has been facing a number of challenges recently and the last few weeks have seen rental demand soften a little in some areas. This is due partly to the usual pause during the February half term school holidays and also due to concerns about coronavirus. This is causing a slowdown in enquiries from professionals from Asia, who are reluctant or unable to travel at the moment. As a result, most of the enquiries we are now receiving are from professionals already living in London or from other parts of the world.
So with rental demand a little quieter than usual in some areas, the other challenge for landlords is to maintain realistic expectations about asking rents. Many new landlords, especially those who bought off plan several years ago and are now completing, may have expectations which do not match the fluctuating market conditions. London’s residential rentals market varies subtly from month to month and brand new rental properties must be priced according to current market demand. Not only must asking rents be in line with similar properties locally, and this may sometimes be less than was quoted originally by the developer or sales agent at the time of purchase, it is also important to factor in the current condition of the development. For example, building work may not yet be complete and tenants will, therefore, expect the rent to reflect this and compensate for any noise or inconvenience.
Small presentation details remain extremely important when it comes to presenting a property to appeal to professional tenants. If a rental property ticks all the boxes – accurately priced, well presented, with a good layout, good amenities and an easy commute – it should still let quickly. We have even sometimes seen two or three offers made simultaneously on a single property. In some developments, applicants have snapped up an apartment without even seeing it, such is the demand for the best properties and an applicant’s determination not to miss out on their chosen rental home. As ever, presentation is key to ensure a brand-new apartment stands out from other nearly identical properties in the same building. An unfurnished property will linger on the market for longer than similar, but stylishly furnished homes. Often, a tenant actually falls in love with the styling and design of the property – it’s a cliché but it really is about the ‘wow’ factor.
If you are completing on a new build property soon and need an up-to-date appraisal of the rental value, contact us so we can update you with the prevailing local market conditions.
Our City and East London offices are seeing strong rental demand, with international companies actively seconding staff to their London offices. In fact, the numbers of professionals moving to London appear to have been increasing recently. In particular, we continue to see higher than average numbers of enquiries from US professionals moving to the Capital. Budgets are good and many applicants are looking for homes in some of the City’s brand new, luxury developments. These include Royal Mint Gardens which has been very well received. In less than a month, we have already let 24 of the new instructions we have received there. Rents are from £550+ per week for a one bed and £650+ per week for a two bed. Also popular is the new Principal Tower where one bed apartments are achieving £625+ per week and two beds £775+ per week. At London Dock in Wapping, Emery Wharf is now completing and we have already let several units. Studios are achieving £450+ per week, Manhattan apartments £485+ per week and one beds £575+ per week. Timberyard is another brand new development which is now starting to complete. It’s close to the river and a short walk away from Surrey Quays mainline station. We are now receiving enquiries for apartments here, with rents starting at £340 – £365 per week for a one bed and £400 – £450 per week for a two bed. In Canary Wharf, our team are working hard to gain new instructions as we are short on stock and apartments here let almost immediately. The next new development to launch will be The Madison in E14 – apartments here are expected to start completing in two or three months’ time. South of the river, we have also been receiving a lot of interest in the final phase of apartments at Kidbrooke Village and also Barracks Court at the Royal Arsenal Riverside in Woolwich, both of which are developments known for offering excellent value for money.
At Fulham Reach in Hammersmith, West London, rental apartments overlooking the River have been letting quickly, almost as soon as they become available. All of our rental apartments at Sovereign Court are fully let at the moment. It is getting even busier and more applicants are getting in touch with us so our Hammersmith lettings branch is very keen to discuss new instructions with landlords. Budgets are good and applicants rarely try to negotiate as they know that there are so few properties available. Tenancy renewals also remain very high, which is adding to the shortages of stock. At Dickens Yard in Ealing, it is a similar story with shortages of stock and apartments letting very quickly, as soon as they become available. One of the latest developments to launch nearby, in Harrow, is Eastman Village. Apartments are starting to complete here and we have already received a number of instructions from landlords. We are expecting rental demand to be good as the development is close to Harrow & Wealdstone station so only a short commute to central London. One bed apartments are expected to achieve £275 per week and two beds £325 per week. Rental demand is also good at near our Kew Bridge branch in Brentford where Habito, the new residential development in Hounslow, is proving popular – we have let almost all our stock there. Rental demand is also good at Imperial Wharf near Fulham which remains perennially popular with City professionals thanks to its riverside location and excellent transport links including its own railway station and River Bus service.
Our Hyde Park, Kensington and Knightsbridge branches have seen rental demand soften a little recently which may be because many professionals who choose to live in the area are from China and Southeast Asia and there is currently a slight downturn in new applicants moving to London from these regions. Tenancy renewals amongst existing tenants remain high which is good news for landlords and many of our enquiries now are from UK-based tenants and overseas professionals already working here. We are however carrying out regular viewings remotely by video for applicants from overseas looking to move here over the next few months when hopefully the current situation improves. We do have good stocks to show tenants, with the properties letting most quickly those that are most attractively presented, with high quality furnishings, as they present so well online. Our Asia landlords do understand current difficulties though and appreciate that properties may take longer to let at the moment. We continue to receive enquiries for high end properties priced at £1000+ per week although we have limited stocks of these so are keen to discuss new instructions with landlords.
Over at our Nine Elms branch in zone 1, our lettings team has seen a slight downturn in enquiries from overseas applicants this past month. However, rental demand generally remains high and it is quite common now for applicants to sign a tenancy simply based on the reputation of the development, without actually having viewed the property, a sign of its increasing popularity. Nine Elms Point and Battersea Power Station remain firm favourites.
Shortages of stock remain frustrating for our lettings teams in Highgate and Hampstead as we continue to see existing tenants renew their current tenancy agreements as there is not a lot of choice when it comes to new rental properties to view. Most tenants only move to a new rental home if they have a very good reason to do so. Apartments at the few new residential developments close to the area such as Highbury Stadium and Woodberry Down in North London, remain very popular and let almost immediately, sometimes before they are even advertised. One bedroom apartments in Hampstead still remain in high demand but stock is very hard to come by.
Continued strong rental demand at Beaufort Park in Colindale means we have applicants scrambling over properties, many are letting almost as soon as they hit the website or are let to our growing waiting list. We are still working with a number of tech companies relocating to London, finding homes for their staff as they expand their operations. Many professionals don’t mind the 30 minute commute into the City as they are getting the same high quality accommodation and facilities at a much lower rental than they would pay for the same in the centre of London.
If you have a property becoming available soon for rental and would like an up to date appraisal of what rent you can expect, why not ask us for a valuation. Or talk to one of our branches. Contact us.
View all posts by Anita Mehra