London Rental Market – February 2015

Rental demand across London remains brisk, buoyed by increasing numbers of enquiries from corporate tenants. The popularity of new residential developments remains undiminished and a driving force in the London rental market.   Younger tenants, particularly those from overseas, are often now opting for a new apartment in a development over a more traditional period conversion, a trend which we expect to grow still further as we seeing increasing numbers of overseas professionals moving to London for work.

Central London

The market for smaller rental properties (under £500 per week) has been extremely busy in Kensington and we are starting to run short of stock. With so many applicants at this end of the market, competition is strong and one bed apartments are letting almost immediately, usually for the asking rental or perhaps with a token reduction of around £10 per week.

Many tenants are looking for a new property in a development, even though these are in short supply in Kensington. Young professionals from Europe, Russia, the US and the Far East in particular tend to favour modern apartments over period conversions and are looking for outstanding quality and the feel and high spec of a brand new property.

There is exceptional demand for developments like 375 Kensington High Street which tend to create their own market – when a property comes up we receive high numbers of enquiries, in fact we often have a waiting list of applicants for these prestigious developments.

With this in mind, we would urge owners of older properties and period conversions to consider investing in the refurbishment of their property, installing a new kitchen and bathroom if necessary, redecorating and fitting wooden flooring which is a ‘must’ for renters. This type of high quality finish is essential in order to compete with the newer properties in modern developments.

Rental demand at Kew Bridge West in West London remains strong and, with the second phase of apartments currently completing, we are seeing plenty of applicants for this smart, new development. One bed apartments are renting for £325-£380 per week and two beds for £485-£600 per week, depending on size, situation and outlook. Rental demand at Kew Bridge West looks set to equal the popularity of Dickens Yard in Ealing which again, continues to soar. Here, demand for one bed apartments in the new Skyline building in particular has been insatiable with apartments flying out as soon as they become available and waiting lists of applicants for much of the time.

City, Canary Wharf, Docklands & East London

The City and Canary Wharf rental market goes from strength to strength, with high demand and good stock levels. One and two bedroom properties priced at up to £650 per week are letting incredibly quickly. Transport links remain a priority and while applicants will accept a longer commute if it allows them to save on their rental costs, they prefer to be within a 10 minute walk of a Tube or DLR station. Overseas tenants in particular prefer to be within only a short walk of a tube station as they like to be in an area which they feel they know and which seems more familiar to them. Other priorities for tenants include a gym, high speed internet access and increasingly, a concierge service.

Presentation remains key to ensuring a property stands out from the competition and lets quickly. Applicants expect showhome standards so properties furnished by a professional interiors company let more quickly. The difference between a bland, neutral apartment presented for rental direct from the developer and one that has been beautifully furnished and dressed, is enormous and is a huge factor in determining how long it will take to let.

Overseas landlords will usually use a professional company to achieve this standard of presentation, although UK-based landlords can sometimes try to reduce costs by furnishing a property themselves. In our experience, this is often a false economy as properties that are not immaculately presented are slower to let and void periods can be longer.

North/North West London

We have had an extremely positive start to the year, with very high demand for rental properties in Highgate over the last few weeks. The rental market is stabilising now and not quite as frantic, but we remain very busy with enquiries for one and two bedroom apartments.   Budgets are good, with typical rentals of £300-£400 per week for a one bed and £350-£550 for a two bed property. Most properties in this price range are achieving asking rental or close – within 5%.

Tenants’ requirements, of course, vary when they are looking for a rental property in Highgate but their key criteria remain value for money, good transport links and excellent presentation. This part of North London, being close to Hampstead Heath, is popular with pet owners, and we continue to seeing growing demand for rental properties where a pet will be welcome.

Demand for properties within new developments is still very strong, even though they are in short supply in this area. We always see high demand for properties in developments like Highbury Square, Woodberry Park in Finsbury Park and Barnsbury Place in Islington. Applicants love the feel of a brand new apartment, the amenities and benefits such as a concierge service. They enjoy being able to simply walk into a property and live ‘the lifestyle’.

If you are looking to rent a property in London, please contact our friendly lettings negotiators who have excellent local knowledge and will help you find your ideal home.