The London rental market – May 2019

I have just returned from one of our international roadshows where many investors are keen to get an update about what is really happening on the ground here at the heart of the buy-to-let London property scene. With so many voices in the media and being thousands of miles away from their investment, I guess having an agent who is truly international does have many plus points and I am grateful for their faith in us and their continued business.

Demand for high quality rental accommodation in London remains strong but the rental market continues to be extremely challenging for landlords. Tenants are increasingly educated as to the nature of the market and the locations they want to live in; they often know the types of property available, local asking rents, negotiating tactics and factors which influence the market, across London generally.

Of course, many areas are experiencing shortages of some types of property, particularly smaller apartments, leading to strong competition amongst tenants. But there are also times, such as when a new development completes, that tenants know there will be plenty of availability so they view and even make offers on multiple properties. They take their time and choose the property – and landlord – who agrees to the best deal for them.

In these uncertain times most tenants understandably wish to reduce their costs too. So they negotiate hard. Many ask for break clauses to give them flexibility in a more uncertain jobs market. And at the moment, we are also seeing some tenants delay a move as they know the agents’ fees ban comes into force in June – so they are waiting until this takes place in order to cut the costs of moving to a new property.

So despite high rental demand, landlords must remain competitive in what they offer and the core values of letting remain as important as ever in order to secure a tenant, minimise voids and maintain a good rental yield. Listen to your letting agent’s advice. Make sure your property is priced correctly in line with market conditions. Ensure it is well presented with good quality furnishings to appeal to your target tenant. And be prepared to negotiate with applicants.

We have 16 lettings branches covering London, so for the latest information on market conditions in your area, please contact the Benham and Reeves branch nearest to your rental property.

The City and East London

We continue to see buoyant rental demand across our City and East London branches but remain short of stock of properties of all sizes and price ranges. It is proving difficult to keep up with the demand and we are keen to talk to landlords about new instructions. Tenants’ budgets generally are good and demand is high across the board, from smaller one bed properties at £400 per week to higher end apartments at £1000 per week. Professionals working in the tech sector are a key influence, dominating demand for properties at the moment and all our branches are busy finding homes for tech professionals within an easy commute of Old Street/Silicon Roundabout. We are also seeing high demand from professionals working in the banking/finance sectors looking for rental homes priced at up to £1,500 per week.

Our City branch is looking forward to the completion of the 50 storey Principal Tower in Shoreditch and we have a number of corporate tenants looking for homes in this high spec development. Asking rent are likely to be £550+ per week for a one bed apartment. We also have tenants fully referenced and waiting to move into the Atlas Building in Old Street which completes in July – one bed apartments should achieve upwards of £525 per week.

Across Canary Wharf, we do still have good stocks available so this location is a good option for tenants as there is plenty of choice here at the moment. In Wapping, Emery Wharf, the next phase of London Dock, completes from August onwards and rents are expected to be £525+ per week for a one bed apartment – again we expect demand to be high as this development is very popular with tenants. At Surrey Quays, new phase Marine Wharf East continues to attract a lot of interest from applicants, with one bed apartments achieving upwards of £360 per week while at Kidbrooke Village near Greenwich/Blackheath, the recent completion of the Hopgood Tower is generating a lot of interest amongst renters looking for good value at this perennially popular development.

West London

Rental demand is continuing to pick up in West London, with our Ealing, Kew Bridge, Hammersmith and Fulham branches all reporting enquiry levels to be strong and increasing. At Fulham Reach in Hammersmith, our branch is busy, mainly handling re-lets as new stock is in short supply. The completion of the latest building, the Henley Apartments, has been delayed a little until July/August and we expect these shortages of stock to continue until this latest phase becomes available. We are taking on new instructions at nearby Sovereign Court and Queens Wharf though. With high levels of enquiries and limited availability, most apartments are achieving asking rental. In Ealing (Dickens Yard) and Kew Bridge demand is also increasing and with stocks limited, both branches are keen to discuss new instructions with landlords as they have waiting lists of tenants keen to move to these developments. Japanese corporates are still busy looking for new homes at the moment and we expect this demand to remain high at least until the end of May. Our Kew Bridge branch is handling a lot of enquiries for Queenshurst in Kingston while in Harrow, we have let most of our apartments at the new Harrow Square development which has proved to be extremely popular with tenants. In fact most apartments here have achieved £1350 – £1400 per month, slightly above our original asking rentals.

North London

Our North London branches in Hampstead and Highgate have reported an increase in demand over the last few weeks and most properties are now letting quickly and achieving asking rental or close. With tenancy renewals still very high, few properties are coming back onto the market so we remain quite low on stocks and availability is limited, of smaller properties in particular. Having said that, it is always the most attractively presented, contemporary and modernised properties that let most quickly. As ever, apartments at Beaufort Park in Colindale are letting quickly, mainly to professionals working in the City and increasingly those working for the many tech companies moving to Kings Cross which is just a short commute away. Stocks are good and we are now starting to receive instructions at the latest phase, the Castleton Apartments, which come to market imminently.

Central London

Smaller properties are letting well in central London and demand is continuing to increase in Knightsbridge, Kensington and Hyde Park, but competition is strong so apartments must be extremely well presented and contemporary in their design in order to compete with new build developments which set the bar high in terms of presentation. In fact, presentation is often a deal-breaker for applicants who understandably will always choose a refurbished, attractively furnished property over one that is looking tired. Landlords who have not refurbished their property in a while and who are finding it hard to find a tenant should therefore consider upgrading their accommodation to ensure that it appeals to tenants who are increasingly demanding in their expectations. Accurate pricing is also essential, with properties priced at up to £1,000 per week usually in highest demand. We do have some shortages of stock, particularly smaller one and two bed apartments.

In Nine Elms, demand remains steady although we do have limited stocks of one bed apartments which tend to be most popular amongst tenants. Over the next weeks we will be seeing new phases launching though which should help to alleviate this. From June we will have apartments available at the new Gladwin Tower at Nine Elms Point while apartments are also completing soon at Keybridge and The Residence.