It’s peak summer season for the London rental market and demand continues to grow, adding to the severe shortage of rental properties in the Capital. Across our 19 London lettings branches, we are desperately short of stock, as many apartments are letting within a couple of hours and in some cases just minutes. Often we are letting a new rental property as soon as it goes onto our website, often without a physical viewing.
This strong tenant demand and the ongoing shortage of supply is keeping rents high, with many properties letting for up to 10% more than before the pandemic and in some central London locations, we are seeing increases of 15%. Clearly, landlords do not need to negotiate in this frenetic market. In fact, many tenants are now putting in above asking rent offers in order to outbid other applicants.
The shortage of rental properties is so severe that we urgently need to speak to landlords with vacant properties to let – either brand new flats they’ve just completed on or older properties that are currently vacant. Please call your local Benham and Reeves branch for an up-to-date rental appraisal.
International students are back in force, taking up university places that they may have deferred for one or even two years. With numbers back to pre-pandemic levels, this is creating a surge in enquiries as students look to find a rental property in time for the start of the new term in September. We expect this high level of student demand to continue right through until the end of October.
The shortage of rental properties in London and soaring demand has made headlines around the world so students have been planning ahead more than ever before. They were viewing properties online or asking UK-based family or friends to view a property on their behalf so they could pay their holding deposit and secure a home quickly, several weeks before they plan to move in, if necessary. Usually, they’ll have done their research well in advance and be aware of the new-build property developments they want to live in so they’ll be fairly familiar with the location, specification and amenities nearby.
Typically, most students wish to be within a 15 to 20 minute walk of their university campus and ideally they prefer not to have to use public transport. They have good budgets and a detailed wish- list of requirements. As well as close proximity to their campus, they typically want to live in a safe neighbourhood and in a development with good security, ideally with a 24 hour concierge. They like good amenities such as a gym and a swimming pool and facilities such as cafes and bars not too far away.
Across London, tenancy renewal rates remain extremely high, and in many areas over 90% of our current tenants are renewing their existing leases. The difficulties in finding a new rental property in this highly competitive market and the costs involved in moving, mean that most existing tenants find it much simpler and cheaper to stay where they are. Of course, this doesn’t help ease the shortage of rental properties so this is another challenge for all letting agents in London.
In this crazy rental market, with competition so fierce, many new applicants are requesting longer tenancies than previously, perhaps two or even three years. This clearly gives them stability and saves them the stress of competing for a new home, when there is currently very limited choice.
It’s also clearly good news for landlords who retain a continuity of rental income, with no void periods (although these are minimal at the moment). Most existing tenants are happy to accept a rent increase in line with current market conditions when renewing their tenancy, as this still tends to be less than if they were taking on a new tenancy for a new property.
Our City and East London branches have very limited stock, after a busy first half of the year and now an influx of international students looking to rent an apartment before the start of the university term in September. Most have no choice but to carry out online viewings from home and are renting the property in advance but not moving in until September. Budgets are good – typically up to £700 per week for a one bed flat, up to £750 per week for a two bed and up to £1000 per week for a three bed, usually for sharers. With limited stock, most properties are letting within hours. Around 70% of students are from China and the rest are a mix of nationalities – particularly India and the Middle East.
The new phase at London Dock, Merino Wharf, is now completing and has been very well received and is popular both with professionals and international students – we desperately need new instructions here.
Demand is also exceptionally high at Royal Arsenal Woolwich while at 250 City Road in Shoreditch, our branch there reports strong demand, particularly from Chinese international students with good budgets.
We currently have no apartments available for rent at 250 City Road, as all our properties are either let or tenants have renewed their tenancies. It’s a real favourite with Japanese business expatriates and our Japan Desk based here has many corporate tenants on their waiting list who are seeking a tenancy in the next 4-8 weeks. Another popular building is the Makers Building near Old Street N1, we recently took on a new rental instruction here and received 20 enquiries over a week – most from international students.
Rental demand is high across our central London branches, with little stock available and properties renting as soon as they reach our website. As I already mentioned, this is peak season for international students so demand really is exceptionally high. Most are looking to move into a property in September but are renting a suitable flat immediately if one is available and our branch managers report never seeing such a crazily busy rental market with many applicants facing constant disappointment.
The Knightsbridge sales values have increased quickly in recent months so this has pushed some into the rental market. However, a surge of enquiries for conversions and new build apartments here cannot be met as we simply do not have enough stock to offer.
Budgets are good – in Nine Elms Vauxhall, our branch have apartments priced up to £800 per week which are letting instantly – whether a studio, one or two bed flat. Some students rent on their own but we are also seeing a lot of enquiries from sharers and are doing our best to accommodate where the development lease allows. At this price level, apartments are usually let before they go onto our website or within five minutes – literally!
Another popular development, White City Living in Shepherd’s Bush where we have a branch on-site is equally busy and short of stock. This is another popular development with Japanese expatriates, as well as international students and local corporates working for tech firms along the M4 corridor and nearby.
Colindale’s popularity with London’s renters goes from strength to strength, both for the highly sought-after Beaufort Park development, which kicked off the area’s regeneration back in 2006, to newer developments such as Colindale Gardens. At Beaufort Park where we have a branch on-site, our lettings team is daily receiving circa 12 enquiries for every available property. Apartments are achieving asking rent and sometimes higher. Some landlords have been expanding their portfolios by buying in new buildings such as Finlay House, Farington House and Fairbank House – these new apartments are being snapped up by renters as they complete, often before they reach our website. Landlords are achieving good yields here as we have virtually zero void periods.
At Colindale Gardens just across the road from our branch, we have several apartments at the newly completing Gladness House and these too are renting immediately. We are seeing a lot of activity from relocation agents looking to house young corporates and professionals tend to be looking for continuity when they rent a property, ideally looking for a two or three year lease. There’s still a lot of demand from professionals working in the tech industry. And of course, student demand is also strong – both from international and UK-based students.
In Highgate, Hampstead and Dartmouth Park, rental demand is high, with flats letting instantly. We simply can’t replenish our stocks quickly enough. Applicants are competing for properties, whether studios, one, two or three bed apartments. Historically, rents are at an all-time high, with many flats letting for over their asking rental. For example, a one bed apartment at Highbury Stadium Square recently achieved £1800 per month, significantly above the usual guide price of £1600/£1650 per month. Typically, a family house will go onto our website and we’ll receive 10 enquiries in the first couple of hours. The first or second applicant will usually take it. Rents are 10% to 15% higher than before the pandemic, particularly in Hampstead.
The West London rental market is also incredibly busy, both with professionals and international students. Our West London branches are all extremely short of stock and flats let almost immediately. International students are renting flats with a planned move-in date in September, and they’re happy to take both furnished and unfurnished properties. Manhattan studio apartments, as well as one, two and three bedroom flats are popular in sought-after developments including Imperial Wharf, Sovereign Court and Fulham Reach. Budgets are good. Many students are about to start their university education at Imperial College, as well as the Royal College of Art, both local to Hammersmith and Fulham.
Corporate professionals and new graduates are actively looking for new homes in West London while developments such as Dickens Yard in Ealing are always sought-after and now more so because of the nearby Elizabeth Line. Japanese business expatriates are also showing a lot of interest in Hammersmith, namely Sovereign Court and Fulham Reach which are both popular Berkeley schemes.
Further down the River Thames, our Kew Bridge branch report brisk business in Kingston with rents surging 15% in the past 6 months. Berkeley’s Royal Exchange will be completing in the Autumn and so we are looking for rental instructions here to meet demand from waiting lists we are building.
With rental demand so high, we urgently need new instructions for our waiting lists of applicants. Please get in touch with your nearest Benham & Reeves branch if you have a vacant apartment or one becoming available in the near future. Our staff are well versed and will be to provide you with a free market appraisal of what we can achieve for your property.
View all posts by Anita Mehra