The London rental market is showing no signs of cooling down. In fact, demand for rental accommodation in the Capital remains at an all-time high, far outstripping the supply of properties available. New rental listings across our 19 London lettings branches are down 18% compared to Q2 2021. And with interest rates rising again, the tables have switched, and it is cheaper to rent than service a mortgage for the same amount of outlay. This is a reversal of pre-pandemic conditions and of course, applies to London mainly, where property prices are higher than other parts of the UK.
Most of our branches are letting apartments after only one or two viewings at most, and usually our teams will have received and had an offer agreed on a property from an applicant on our waiting lists, before it reaches our website. So London is back to its pre-pandemic economy and lifestyle. The hunger for a return to normality is overwhelming – and we don’t see the shortage of London rental properties easing for the foreseeable future.
Several new property developments or new phases at existing developments have been completing recently but this is only bringing a tiny fraction of properties to market and we are urgently looking for new stock. So if you are completing on a new buy-to-let property or have a tenant moving out soon, please call your local Benham & Reeves branch for an up-to-date rental appraisal.
A key trend we’re seeing now is the gradual shift in tenants’ priorities as they adapt to a new post-pandemic lifestyle. And there are some interesting changes in priority here. While the desire for more space (both outdoor space and a work-from-home space) continues, it is often no longer seen to be essential as it was. And certainly not if it means a much higher rent.
Affordability is a growing issue for applicants now and many have more restricted accommodation budgets due to soaring inflation and the rising cost of living. So they’ll only wish to pay rent for space they really need. If that means compromising by working at the kitchen table rather than a dedicated office space (or spare bedroom) then that’s fine.
Lifestyle is also now more important than previously. Some applicants are now looking for a home closer to their place of work, allowing them to walk to the office – cutting their travel costs and improving their commute.
This desire for a better lifestyle is also prompting some applicants to move from older properties that may be looking a bit tired, to a brand-new apartment in a development with high spec homes and amenities, if they can find one. This too is not just a lifestyle choice, it’s often a cost-saving move too. A development closer to their office, with its own gym, pool and concierge could mean a tenant could cancel their gym membership and cut transport costs so actually save money in the long run while enjoying a higher specification home.
We are already seeing a surge in rental enquiries from international students planning to move to London in September for the new university term and many students have been actively looking for a property since the start of this year. They’ve been warned by friends how difficult it is to find a rental property in London right now.
Those that can afford to are often signing a tenancy now but taking occupation until September. They’ll pay to do this to secure a property rather than find themselves without a home in early September when they arrive in London and need to feel settled.
We’re also seeing a lot of enquiries from students already living in London who are now looking to move on after their first year, often because they rushed into making a quick decision last year and are now not happy with the flat they’re now living in.
Rental properties across the City and East London are letting quickly, and we usually receive an offer after only one or two viewings. Online viewings remain extremely important too and typically we might receive 10 enquiries on a property almost instantly and then receive one or two serious offers based on this. There is a little more movement in the East London rental market now and tenants can shop around a little more than was possible earlier in the year, as some tenants are now vacating their properties, often to buy their first home, or as new developments launch after a couple of years of delayed completions.
So the rental market in East London is stabilising and although renewal levels are still high, there is more choice for applicants, although they still need to make an offer quickly to secure their chosen property. Rents are high though, typically 5% – 7% above pre-pandemic levels, but in some cases up to 15% higher.
Developments offering both a high spec and good value for money are at the top of many wish lists. So flats at developments such as New Market Place in East Ham have generated enormous interest and are rented as soon as they become available. Similarly, while at a slightly higher price point but still offering excellent value, Merino Wharf at London Dock and London Square Greenwich are also much in demand by City professionals.
The Crossrail effect is also transforming rental demand in areas close to Elizabeth Line stations. We simply can’t get enough stock in schemes such as Royal Arsenal Riverside, a highly popular development with its own Crossrail station in Woolwich. Professionals from tech, finance and legal sectors have been quick to snap up rental properties here now that journey times to the City and central London have been slashed.
Our West London lettings branches are all short of stock and have waiting lists of applicants. Apartments are letting immediately, and there are currently no void periods between tenants. In many developments, we are now carrying out block viewings with multiple applicants. Typically we’ll receive one or two offers immediately.
There’s a real uptick in demand from international students looking for homes in areas like Fulham Reach and Sovereign Court, both situated in Hammersmith, particularly Chinese and Thai students. They’re now looking for a home ahead of the September university term and we will have more properties becoming available in these developments over the next few weeks, giving them slightly more choice.
New property development The Green Quarter in Southall is seeing strong demand, increasing further owing to the opening of the Elizabeth Line (Crossrail) and we’re also handling new instructions at Hayes Village and Western Circus in Acton – again these are seeing strong demand. While over at White City Living and Television Centre in Shepherd’s Bush, apartments are also in high demand and availability here is very limited.
Rental demand is strong in Nine Elms and our lettings branch currently has no apartments available to rent – we simply don’t have enough supply to meet demand and have waiting lists of fully referenced tenants ready to make an offer as soon as a flat becomes available. Even when new apartments complete, we usually have an offer agreed before completion. We’re currently agreeing deals on flats that will become available in September.
Much of the current demand is from wealthy international students who are looking for a London home before they arrive in the UK in September. They’ll usually rent (and pay for) a property in advance if this ensures that they will secure their chosen home, rather than risking losing it to someone else. Many have been advised by friends that it is very difficult to find a rental property in London so they’re happy to make an offer based on a video tour. This is a trend that has been created by the Covid 19 pandemic and it’s one that is here to stay since it provides a convenient way to decide if a property is right or not. We’ll show an apartment over FaceTime or a WhatApp video call and this is usually sufficient for the applicant to make a decision.
We are chronically short of stock in Hampstead, Highgate and Dartmouth Park, with properties letting immediately. Rents are currently around 10% higher than before the pandemic. Demand is high for larger family homes at the moment as families look to settle down before the start of the September school term. When a new family home goes live on our website, we’re currently receiving 10+ enquiries in the first hour or so. Typically, if the property is well presented, the first applicant will make an offer and take the property for the full asking rent.
Demand at Beaufort Park in Colindale remains very high and we have very little stock here. Findlay House – the latest building to complete – has received enormous interest and we have let virtually all our stock. Highbury Stadium Square N5 and Hale Village and Anthology Hale Works, both in Tottenham N17, are among the other new developments in North London attracting a lot of interest. While Watkin Road in Wembley is part of a major regeneration scheme on the fringes of North West London and this development too has been receiving a growing number of enquiries for rental accommodation.
With such high rental demand across London, we urgently need more stock. So if you are completing on a new apartment soon, or have a vacant apartment in London, get in touch with your local Benham & Reeves branch for a free market appraisal. Our International offices are also able to book in a valuation, free of charge, with one of our experienced team. If you haven’t had your rental investment property valued for some time, now is a good time to get an accurate appraisal of what we could achieve.
View all posts by Anita Mehra