London Rental Market – March 2015

Spring is definitely in the air, with demand for rental accommodation in London hotting up along with the weather.  The number of enquiries being handled by our 11 London lettings offices is increasing as tenants come out of ‘hibernation’ and look for a new London rental property.   Generally though, while demand is good, accommodation budgets remain under pressure so we would advise landlords to be flexible and prepared to negotiate in order to secure a good, reliable tenant.

Central London

We’ve seen a real energy return to the rental market in recent weeks and a noticeable increase in the number of applicants at our Knightsbridge office. Renewals are at an all time high, 80%-85%, as tenants decide it is more cost-effective to remain in their current rental property. This is good news for landlords and the London rental market. Maintaining a continuous income stream is vital and savvy landlords are listening to our advice, negotiating maybe just a modest rent increase to keep a good tenant rather than risk an expensive void period. We also encourage tenants to ‘lock in’ to a second year option to renew their tenancy as this too gives both tenant and landlord greater stability and security.

The rental market is challenging though and tenants remain price-sensitive –applicants’ salaries aren’t rising in line with RPI so landlords should have sensible expectations. With our years of experience in London lettings, we know our business and we have our clients’ best interests at heart. So if a property isn’t letting, we’ll advise landlords how to enhance its appeal. Price and presentation are of the utmost importance so we advise being realistic about the rent they can achieve and ensure their property is priced in line with similar ones. And if the property is looking a little dated, we may recommend modernising or refurbishing it to generate interest, ensure the property stands out from the competition in order to attract a good tenant.

City, Canary Wharf, Docklands and East London

The rentals market in the City, Canary Wharf and Docklands is brisk and we are extremely busy with enquiries, particularly for studios, one and two bedroom apartments.  Around 70% of tenants are renewing their tenancies at the moment, suggesting most are happy with their rental properties.  Generally tenants’ budgets are good and landlords are achieving close to asking rentals.

Interest in regenerated areas such as the Royal Docks and also south of the river in Woolwich and Abbey Wood, continue to gain momentum. Enquiries remain at a strong level for developments near the DLR and new Crossrail routes. The market remains price-sensitive and tenants can find more value in these areas.

With so much redevelopment taking place, the character of these regenerated areas is changing and they are becoming increasingly attractive to tenants who are looking for a balance between a smart apartment, an easy commute and affordable rent. Reducing accommodation costs is a priority for many, particularly those that are saving to buy their own property.

We’re also seeing high demand for apartments at Riverlight in Nine Elms, the largest area of regeneration in central London. Although it is early days for this development and many of its amenities are not yet complete, we’ve had enormous interest in the first phase instructions we received, all of which let immediately.

At the top end of the market, we continue to see high demand for rental apartments at high profile, luxury developments such as The Heron, Altitude and Avant-garde and we have been able to secure good tenants for our landlords there.

North/North West London

The rental market in Hampstead is buoyant and we’re receiving increasing numbers of enquiries, particularly from young professionals and couples looking for one and two bedroom properties in the £450-£600 per week price bracket. The rental market in Hampstead, Highgate and across North London generally remains price-sensitive though and applicants expect landlords to consider offers and be prepared to negotiate. Around 70% of existing tenants are renewing their tenancy agreements, suggesting that they are keen to avoid the cost and inconvenience of moving home.

While smaller properties definitely represent the busier end of the Hampstead rental market, we are also starting to receive enquiries from relocation agents looking for large family homes. This upturn in demand is taking place earlier in the year than usual, perhaps indicating that the relocation market will be busier this year – many of these enquiries are from executives moving to London from countries within mainland Europe.   We have a number of high end family homes to rent at £2000+ per week and demand for these is likely to increase as we enter the busy spring and summer seasons.

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