London Rental Market – June 2015

Summer is finally here and the buzz is back in the housing market. The run up to May’s general election meant property sales were slow in the run-up, with landlords preferring to wait before making any major decisions such as deciding whether to sell. Now the outcome is clear, we are seeing landlords happy to continue letting their London properties and investing to keep their properties in premium condition. In addition, overseas landlords continue to see London as a safe place for property investment, as witnessed at our recent international property seminars.

Central London

Our offices in Central London are seeing a boost in demand for short-let tenancies as visitors look to make the most of the London’s vibrant summer events calendar. There is, as ever, a great demand from international students for premium accommodation in new-build developments ahead of the September term.

The team in our Knightsbridge office has maintained a high level of tenancy agreements on premium-priced properties, with renewal levels at a gratifying 85%. Tenants are keen to move less often once they have found a home to their liking and of course, landlords benefit from a continued income stream. Key to this level of renewals is an excellent landlord/agent/tenant relationship. Our stringent vetting procedures ensure our landlords’ properties are let to reliable long-term tenants. This approach reaps dividends for both parties. Peace of mind for the tenant and a secured, hassle-free tenancy for our landlord.

Landlords are also seeking our advice on how to maximise the rental potential of their properties. A recent instruction was for a five-bedroom house in Notting Hill which is currently being refurbished to achieve a higher rental yield. With tenants specifying hotel-style interior design, it’s important to give your rental property the wow factor in order to maximise your income potential. Typically we find 85% of properties we furnish are let within a week. For more details on this service, please click here.

Our recently launched free rental valuation service is proving very popular and gives prospective landlords a realistic view to what they should expect to achieve in rental income.

City, Canary Wharf, Docklands and East London

There are some postcodes in London that will always attract interest from young professional tenants. Over the past four years, the City, Canary Wharf, Docklands areas have seen an average renewal level of 65%, rise to 70% this year. PriceWaterhouseCoopers and Ernst and Young are just two of the companies in the financial world who have chosen Benham & Reeves Residential Lettings to manage their corporate letting accommodation arrangements. New developments which offer concierge and gym facilities, continue to prove popular for their employees. These City professionals expect high-end living and good amenities nearby, both areas that these locations excel in.

During the past month, we have also seen an increase of overseas tenants moving to London and relocation agents with the help of relocation agents are drawn to Canary Wharf, the City and Docklands – and with 90-95% of our properties being new developments, we are able to satisfy this demand for modern living.

Particularly interesting is the trend we are seeing for single women requesting property here, which we believe is thanks to the increased investment in infrastructure, improved transport links and the lasting popularity of Stratford’s Olympic development and regeneration.

One bedroom properties in this area are the most sought-after and net a typical £1,400 per calendar month in rental income. These apartments have the dual benefit of attracting both single professionals and couples.

We have recently opened another office in the area to keep up with the rental demand. Based in the London Dock development, our Wapping office adds to our City, Canary Wharf and Greenwich offices which service East London and helps us polarise our reach across the East London Fringes.

North/North West London

Since the election, there has been a massive surge in the rental market and the overall confidence of landlords in the London property market has been restored. Enquiries from both tenants and landlords have increased four-fold since the election at the beginning of May. The level of rental conversions has doubled across the last month and there is a general feeling of buoyancy in the market. Our Hampstead office had their busiest month to date, with lettings up 34% year-on-year.

We have also seen an increase recently in enquiry levels from local residents who have sold their properties, are struggling to find a suitable home to buy and who are choosing to rent in the interim period.

The area is seeing a high demand for three-plus bedroomed properties from corporate clients who are relocating with their families, mainly from America and Europe.

There is a shortage of properties in the £1,100 – £1,500 per week price bracket as tenants choose to renew. This has resulted in bidding situations in some cases.

Smaller one and two-bedroom properties at the £500 – £800 per week continue to be in high demand, with homes situated in the Village proving exceptionally popular as summer arrives.

We have tenant waiting lists for both smaller properties and family homes so if you are interested to know what your property could achieve in rental value, please do use our valuation tool for a free, instant report.

Contact us for more information about the London Rental Market, including investment opportunities within the Capital.