The London rental market – October 2020

The most noticeable trend in the London rental market at the moment is that tenant demand is very unpredictable. In many areas, demand for properties is high while in others the market is quieter and this is fluctuating quite dramatically from week to week.

The right types of property, accurately priced and extremely well presented, are usually letting well but some are taking longer to rent due to the sheer amount of stock available for tenants to choose from. Generally, rents are subdued and the market is extremely price sensitive so landlords must recognise that they will probably not achieve the same rent as they did this time last year. But of course, letting a property is not just about the amount of rent that can be achieved. Finding a reliable tenant who will look after the property and keep it in good condition, as well as pay their rent on time, is equally important.

There’s no doubt that the current situation is difficult and landlords should listen to the advice of a good local letting agent, in terms of pricing and any other measures they should take to find a good tenant. For any new landlords reading this, you can go to our Landlords Hub, there is plenty of advice there too. The rental market has changed dramatically over the last few months and is now quite complex so please do talk to your local Benham and Reeves branch to find out more about local market conditions, to give you the best chance of letting your property as quickly as possible.

Rental demand from international students

We are still receiving enquiries from international students but of course there is a decline in rental demand and numbers are down on what we would normally expect at this time of year. However, there are still students who are taking courses that cannot be done remotely –physics or chemistry for example – and these students are arriving in London now. Most are looking to move into a rental property as soon as possible – in October and November – so this would indicate that many are making last minute decisions whether to start their courses this year, stagger their start date or defer until next year. Many students are starting their courses in a virtual capacity until they are able to move to London and, as a result, we do expect enquiries to keep coming in until the end of the year, later than we would normally expect.

The City remains a popular place to live for many students and generally they are looking to be as close as possible to their university so that they can walk to lectures. The new 250 City Road development in particular has seen quite a lot of interest from international students recently.

The City and East London

Our branches in the City, Canary Wharf, Shoreditch and Wapping, continue to see rental demand pick up and we expect this to continue through the next few months. Of course, the rental market is price driven and trading conditions remain tough. Generally, rents are down by about 20% in some city areas so landlords must be flexible to secure a tenant and minimise voids. On a more positive note, rents have held up well in areas such as Surrey Quays as apartments here were already reasonably priced and there is less available property on the market.

With so much stock available across East London generally, professional tenants are in a good position to negotiate and take advantage of the current situation. Most applicants are already living in London and choosing to move locally, either to save money or to find a better property, perhaps with more space so that they can work from home more easily.

But many existing tenants are opting to renew their current tenancies – we’re still finding that up to 60% of tenants are renewing and most of these are happy to renew at their current rent, without asking for a rent reduction, so this is clearly good news for landlords.

We have seen a couple of new developments completing recently. We have several apartments to rent at 10 Park Drive in Canary Wharf, E14, and although rents are lower than we would have liked at around £450 per week for a one bed apartment, we are seeing good levels of enquiries. Wardian London, also in Canary Wharf, is also attracting interest from renters looking for that luxury lifestyle – there is always demand for this type of high spec apartment.

Our Shoreditch branch at 250 City Road is really busy and is seeing strong rental demand, both from local renters and corporate tenants and our Japan Desk is based here which provides a steady flow of enquiries. Corporate tenants tend to have higher budgets though. One and two bed apartments are seeing highest demand. The development’s popularity is due to its high spec, it is one of the highest quality residential buildings in central London, and of course it is brand new, which is a ‘must’ for many renters. Its location is also a big plus – it’s an easy commute to the City which is within walking distance so residents can avoid public transport, an attractive proposition at the moment. Islington High Street is only 10 minutes away and there are also lovely walks along the Regent’s Canal. With so much appeal for corporate tenants, rents at 250 City Road are holding up well and we are currently achieving around £630 – £670 per week for a one bed apartment.

Central London

In Central London, our branches have been receiving more enquiries than usual, particularly in Kensington where more tenancies have been concluded over the last few weeks. But tenants have a lot of choice and are now regularly making multiple offers on different properties before deciding which to choose, so landlords are finding themselves in a highly competitive market.

Our Knightsbridge branch reports that presentation is more important than ever, particularly with so many initial viewings taking place online. Younger applicants in particular, both professionals and international students, prefer a contemporary finish, with clean, minimal lines and a neutral colour palette, similar to the finish found in modern residential developments. So landlords with older properties should remember this if planning a refurbishment or talk to us as we can help with both full scale renovations or a simple makeover. They should also recognise that in the current market, a refurbishment won’t provide them with a higher rent, but it will help to ensure their apartment lets more quickly and stands out from the competition in a crowded market.

South of the river at Nine Elms, our lettings team are seeing slower than usual rental enquiries and the market is unpredictable. There is a lot of stock as many properties are completing here now so tenants have plenty of choice. Most applicants are professionals working in the City or West End and because the developments in the Vauxhall end of Nine Elms are so popular with professionals, rents have only dropped a little and generally are holding up quite well. Enquiries from international students are much lower than usual. Chartwell House in Battersea is one of the latest buildings to complete and we have quite a lot of interest for apartments here from tenants who are happy to pay a premium for a brand new property.

North & North-West London

In Colindale, rental demand is very good at Beaufort Park and Colindale Gardens, and the newer flats in particular are holding their value and achieving a similar rent to 2019. They tend to let immediately.

We are seeing an influx of international students who will be studying at the nearby University of Middlesex as well as Imperial College, UCL and Brunel University, although while demand is stronger than we had anticipated, clearly numbers are not as high as last year. Rental demand from students here is higher than in many other parts of London. These are international students coming from all parts of the world, from Africa to India and South East Asia. Chinese students who are already living in London are enquiring about moving to Beaufort Park for their second or third year of university. We’re also receiving rental enquiries from lecturers and university support staff. Tech professionals relocating to London to work for companies such as Google and Facebook continue to move to Beaufort Park and they have good budgets. And because many will be working from home for some time, they are looking at larger properties than previously.

In Highgate and Hampstead, the rental market is steady, with plenty of enquiries coming in but a lack of good stock. Demand was quite strong over the summer and reasonably priced, well presented properties are still letting well, mainly to professionals moving home locally. Apartments at Highbury Stadium and Woodberry Down, on the fringes of Highgate are in particularly high demand and these continue to rent very quickly. We’ve also been letting quite a few family homes to corporate tenants, many of whom have been moving to the area ready for the start of the new school term, as well as finding homes for professionals relocating here from overseas, particularly the USA. Applicants are looking for more space now, perhaps moving from a one bed to a two bed flat, so they can work from home more easily and outside space continues to be high on their wish list. With enquiry levels still good, we are keen to talk to landlords who have properties with fully modernised interiors, to let.

West London

Our Hammersmithbranch has had a quieter August and early September but demand is picking up now and there has been a noticeable increase in enquiries although applicants realise they have a wide choice of rental properties to choose from and may take three or four weeks before they decide which property to take. They do have good budgets though. New apartments at Fulham Reach are completing now and while enquiries are not as high as we would normally expect, there is interest and properties are starting to let, mostly to professional couples.
New build developments such as Dickens Yard in Ealing, Kew Bridge in Brentford and Imperial Wharf in Fulham where we have branches on-site, rental demand remains good, particularly from corporate tenants who are moving locally, perhaps to find a larger property or one with outside space such as a balcony or terrace.