Demand for rental properties in London has remained at an all-time high over the last few weeks, intensified by seasonal market pressures; international students have moved to the Capital for the start of the autumn term, new graduates are moving here to start their careers and corporate relocations are picking up dramatically, now that Covid restrictions are over.
So demand continues to outstrip supply, and with rental stocks so limited and higher than usual lease renewals, property in London continue to let within hours. And in many cases, applicants already registered with us are signing a new lease on an apartment before it reaches our website, often without even a physical viewing.
As a result, many of our 19 London lettings branches rarely have more than a couple of apartments to let at any one time, so quickly are properties being snapped up. Many applicants are waiting for six to eight weeks before a flat is vacated and they can move in.
As we move through November, we usually see rental demand ease and the market calms a little. While there are signs that this is now happening, with demand now starting to cool, we do expect enquiry levels to remain higher than usual this year, as some professionals and students have yet to find a rental home due to the current pressures and so will continue their property search into December.
The imbalance between supply and demand means that rents are climbing and generally are up 10% to 15% compared to before the pandemic. Some applicants are making above asking rental offers to try and secure their chosen property. Tenancy renewals also remain high – at over 90% – as current tenants wish to avoid the stress and expense of trying to find a new home in this ultra-competitive market.
We have very limited stocks of flats across East London, with most existing tenants renewing their leases and new instructions letting immediately. It’s been frustrating to have such high demand that we can’t fulfil due to ongoing property shortages.
Demand from international students has been high, particularly in the £600+ per week price bracket. Even with such good budgets, students have been struggling to find a property and we contact applicants on our waiting lists to let them know when a property is becoming available to help them find a home. Typically, we have 10 – 15 applicants waiting for each apartment.
Student demand is starting to slow now, as is usual by the end of October, as applicants have usually found a home by now. We’re currently helping the last few to find an apartment and we have a few properties completing at Merino Wharf at London Dock – this development has been exceptionally popular. Rents across East London are now 10% – 15% higher than their previous all-time high in 2018/2019.
International students have been a driving force in the rental market at Nine Elms and Vauxhall in recent weeks, with demand incredibly high for flats here. Students have larger budgets this year as they realise that the rental market is competitive and they’ll need to pay more to get the type of property they want. Most international students are from Asia, China and the Middle East.
Demand for apartments at DAMAC Tower, which has interiors designed by Versace, has been exceptionally high, with applicants outbidding each other and waiting lists for the next set of completions. Studios are achieving £800 per week, one beds £1000 per week and two beds £1500 per week.
We’re also seeing new apartments completing at Thames City in SW8 – again demand is extremely high here. And we’ve received new instructions at the next phase of Battersea Power Station where a studio flat is typically achieving £700 per week. Again demand is incredibly high. Battersea Power Station’s brand new shopping centre opened recently – it’s a glitzy mix of shops, restaurants and cafes so is likely to draw even more professionals and students to the area now it’s become a hub for shopping and entertainment.
In prime central London, international students have also been driving current rental demand although, again we have not had enough stock to meet demand. In Knightsbridge and in the nearby Hyde Park area, properties have been letting quickly over the last few weeks although demand is starting to cool, with most students having now found a property. Applicant numbers are up on last year and the scarcity of properties means rents are also up in this part of central London.
For international student applicants though, there is a plus side as their budgets are stretching much further due to the weakness of sterling and the current exchange rate.
Limited stocks are also a key feature of the West London rental market and our Dickens Yard (Ealing), Kew Bridge (Brentford), Imperial Wharf (Fulham) and Fulham Reach (Hammersmith) branches are all very low on stocks. Tenancy renewal rates are, at over 80%, extremely high, with tenants only moving on if they have a specific reason to do so, whether moving to a new job or a new country.
So the market is tough for new applicants and many who wish to move to areas like Fulham Reach and Sovereign Court in Hammersmith, for example, are having to wait for at least a couple of months until a flat becomes vacant. We have no one bed apartments at all at Fulham Reach and for landlords, voids are virtually non-existent. With most international students now settled though, we are expecting rental demand to slow down a little.
In most parts of North-West London, Hampstead, Highgate, Dartmouth Park and Belsize Park, apartments and larger family homes are letting very quickly. Stocks remain low and we don’t have enough properties to meet demand. Our Highgate branch recently took on new instructions, both substantial family homes, from landlords who we worked with several years ago. We received numerous enquiries for both houses and both let within a day. There simply aren’t enough family homes in this part of North London and limited stocks mean rents are continuing to push upwards.
In Colindale and Hendon, our Beaufort Park branch is super busy and has almost run out of stock – at the time of writing we had only three apartments available. Most flats are rented out one or two months ahead of becoming vacant, with applicants prepared to wait for several weeks until the property is vacated. There’s been strong student demand, while we also continue to see high levels of enquiries from engineers working for tech companies including Facebook. The area remains popular with Hong Kong BNO passport holders moving to the UK for the first time. Shortages of stock are putting upwards pressure on rents which are now up around 15% compared to before the pandemic. With stock levels so low, we often see applicants making over asking rental offers in order to secure a property.
We are desperately short of rental properties across London, so if you are completing on a new apartment soon or are looking for a new tenant for your property, please contact us for a free market appraisal of your property. You might be surprised at what we can achieve right now.
View all posts by Anita Mehra