Demand for rental properties in London is soaring. The number of enquiries we are receiving is building daily but our key issue remains that we simply don’t have enough stock. In fact, we are currently down 38% in terms of new property instructions compared to same period in 2019. It feels like all the applicants who moved away from London last year are returning – plus we have this year’s applicants looking for new homes too, leading to unprecedented demand.
So clearly, we are much busier than usual and this high demand is for properties across the board – from studios to larger apartments and in all locations. Overseas and domestic professionals are returning to London, relocation agents are calling us and students are very much back with a dramatic jump in the numbers of enquiries we are seeing across all of our 18 London branches.
And because of the shortages of stock, most tenants are not negotiating over rent and are happy to pay the asking rent – as long as this is in line with current market conditions. Tenants recognise they no longer have the front-foot here and some are even complaining about the lack of choice! Many of our client rental properties are being rented within 48 hours of being furnished and our sister company InStyle Direct has been inundated with instructions to furnish and decorate properties so they can be marketed at full rental as soon as possible.
This momentum has been building over the last two or three months and we are not surprised by the surge in demand after the frustrations of a year and a half of lockdowns – the bounce back was always likely to be dramatic and this has proved to be the case.
A turnaround for lettings
So we are desperately short of rental properties. In many areas we are seeing applicants trying to outbid each other for the best properties, with gazumping once again a feature of the rental market.
If you are a landlord with a rental property in a new development or a flat that is soon to be vacated by your current tenant, please get in touch with your nearest Benham & Reeves branch (we have 18 branches across London) to organise a free rental appraisal – we will almost certainly have fully referenced tenants already waiting to move into your property!
Students return to their universities in London
International students are once again a driving force in the London rental market and we have seen a dramatic increase in numbers, with enquiry levels exceptionally strong. They tend to have good budgets to secure their chosen properties. This year, they have had to be extremely organised and generally have signed a tenancy agreement on a rental property ahead of their arrival in London. This usually means viewing a property by video tour, agreeing the tenancy and organising deposits etc before they arrive in the UK. Shortages of stock have caused queuing to view properties with some applicants having to wait until November to move into their chosen property – such is the high demand. Of course, this is good news for any landlords who have a vacant property that will be available sooner.
The City & East London and SE London stock shortage
We are extremely short of stock throughout the City and East London so are very keen to talk to landlords who currently have a vacant property. We already have many fully referenced tenants keen to move into a new home as soon as possible.
This is our peak season in ‘normal’ times so the additional pent-up demand means that enquiries really are going through the roof. Applicants include overseas and UK professionals returning to London and students who are keen to return to their universities this year.
Cashmere Wharf at London Dock is a top performer for us and we recently took on three new instructions here which we let within 24 hours of being furnished – all for premium rents and higher than we had expected. Many applicants who would like to move into a new property as soon as possible are having to wait until November when flats are becoming vacant. They’re prepared to wait though as they recognise the competitive nature of the market at the moment.
Another top performer is 250 City Road in Shoreditch – rental demand remains very high here and enquiry levels continue to grow. But again shortages of stock remain a real problem. Apartments are generally achieving full asking rental. There has been a real surge in demand from international students who have returned to London and really love the location and the quality of this development.
South London – Vauxhall, Battersea Power Station and Nine Elms
There have been a couple of real gamechangers taking place at Nine Elms over the last few weeks. First, the area’s two new tube stations – Nine Elms and Battersea Power Station (on the Northern Line) – are now open. This will have a dramatic effect on applicants’ view of the area and how easy their commute to work will be – whether in central London, the City or the West End. Also, it was confirmed earlier this year that the two new tube stations are in Zone 1, so again this has a significant effect on the area’s desirability and appeal.
Demand is extremely high at all the developments in Nine Elms and we currently have almost no stock – some applicants are waiting until November to move to a new home as nothing is available sooner. Almost all this demand is from international students with very good budgets. Around 50% of these students are Chinese (a good sign that China’s borders are reopening) and around 50% from the Middle East. These students are very well organised. Their university place has been confirmed earlier than usual so they have been able to secure a property in advance. So this university term we are seeing a slightly different and more organised approach. Many of these students are second or third year or PhD students who are returning to university after the lockdowns.
Thankfully, we have more stock coming to the market soon – at Embassy Gardens we have been letting new instructions recently – and at DAMAC Tower, the luxury apartments in Nine Elms with interiors designed by Versace. These are extremely sought-after and with the opening of the Nine Elms & Battersea Tube station on the new Northern Line extension which falls into Zone 1 of TFL’s fare zones, we are expecting to see many more enquiries from private renters as they discover how convenient the location is for commuting into the West End in just 15-20 minutes.
Rental demand in West London is sky-rocketing. Professionals are returning to London and our branches in Dickens Yard in Ealing and Kew Bridge in Brentford are receiving high numbers of enquiries from relocation agents, students and also BNO passport holders from Hong Kong. Stock levels are very limited and with demand so high, many apartments are attracting offers of more than asking rent. Other new developments nearby such as Eastman Village in Harrow and The Green Quarter in Southall are also seeing apartments let almost immediately. Our Malaysia office has also had a very successful run of selling new homes in the scheme to Malaysian investors with budgets of £400-600,000
At Fulham Reach in Hammersmith, business is also crazily busy. The market is moving incredibly quickly with two and three bed apartments letting within 24 hours. Again shortages of stock are our main issue here. A couple of years ago, older properties would take a little longer to let than brand new ones, now tenants are happy to secure any apartment in developments such as Fulham Reach or Sovereign Court. The next phase at Sovereign Court – Beaulieu House – completes this month and we already have many applicants referenced and ready to move into a rental property here. We are pleased to say that we have a lot of new instructions so this should ease stock shortages a little.
As well as professionals, we are also seeing strong demand from students – mainly from China and Asia generally. They have been on our waiting lists and are keen to move as quickly as possible. In general though, stock levels are at an all-time low in West London and we would love to talk to landlords with properties in the any of the areas I’ve mentioned.
Demand remains extraordinarily high at Beaufort Park in Colindale – properties across the board are renting immediately – usually within 48 hours. Again, students with good budgets are very much a driving force at the moment and just a few months ago we could not have predicted how much the market would bounce back after the last lockdown. We’re finding homes for first year students from China, now that Chinese borders are opening up again. The two new buildings to complete, Fairbank House and Fairmont House – are now fully occupied and we let apartments here within 48 hours of being furnished and going onto the market. Generally flats are achieving good rents and many applicants are making offers for over asking rent.
And in the ever-popular areas of Highgate and Hampstead, properties are letting quickly and we have been extremely busy. We are again almost out of stock, particularly of studios, one and two bed apartments. Relocation agents are calling us regularly on behalf of overseas professionals, many from tech companies such as Facebook. We’re also seeing higher numbers of enquiries than normal from students. Many are interested in new developments such as Highbury Stadium Square and Woodberry Park. Generally, any applicants who already live in the area but have to move home, perhaps to find more space, choose to stay local. We’ve also been finding larger homes for overseas professionals and their families, moving here to take advantage of the excellent schools.
Call us for a free rental appraisal
Clearly, rental demand has been soaring over the last few weeks and it can be difficult for landlords to keep up with this rapidly changing market. If you would like us to carry out a free rental appraisal of your London property, please contact your nearest Benham & Reeves branch for more information.
View all posts by Anita Mehra