Rental Market Update – February 2014

Central London

Rental demand is extremely strong across the Hyde Park area and properties are letting quickly throughout the W2 postcode. The corporate lets market is performing well and we’re seeing an influx of international applicants looking to rent a property in central London, enquiring directly and through relocation agents.

Apartments to rent around the Paddington Basin are in very high demand, attracting young professionals and international students in particular. This style of lateral living is what many overseas applicants are used to at home so it is understandable they should look for something similar when they move to London. The new Portobello Square development is also incredibly sought-after, particularly with single professionals and couples. The development is extremely popular with international applicants – around 90% of our tenants here are from overseas.

In Kensington, we’re also busy with corporate lets while demand is as high as ever in the Notting Hill area, both for high end luxury properties and smaller one and two bedroom apartments. Tenants are knowledgeable about asking rents and expect to negotiate but with demand high, they also know they have to move quickly to secure the property they want.

An encouraging trend is the increasing number of tenants we see renewing their leases. Over 80% are renewing at the moment, often choosing a two year lease with a one year break clause.

City, Canary Wharf, Docklands and Greenwich

The rental market is extremely buoyant across the City and Docklands. We’ve had a phenomenal start to the year agreeing a record breaking number of tenancies. We’re very busy with applicants with good budgets and have moderate availability to meet the strong demand. We’re currently letting apartments which won’t become available for another six weeks which really demonstrates the current level of demand and the need for tenants to snap up a property without delay.

New Festival Quarter in Greenwich remains a rental hotspot, with demand continuing to soar and apartments letting very quickly. The level of demand means that tenants are also pushing further out to areas like Deptford and Lewisham. New transport links such as the DLR have transformed the entire area. Currently, rents are cheaper than in the City or Canary Wharf but are catching up due to the spiralling demand.

One clear trend emerging is that many tenants are looking for an apartment in a building with a concierge service. We’ve seen this trend develop over the last few years and around 50% of applicants now request this. It’s high on the wish list of many corporate tenants – it makes them feel more secure and saves them the hassle of having to wait in for maybe a dry cleaning delivery or parcel. A concierge service really adds value and ensures apartments let more quickly, a real advantage for landlords in a competitive market. So this is perhaps something for investors to bear in mind if planning to purchase a buy-to-let property in Docklands.

North/North West London

We’ve had a really positive start to the year at our North London offices, with good demand across all types of properties to rent in Hampstead and neighbouring areas. We’re particularly busy dealing with enquiries from relocation agents, earlier in the year than you might usually expect to see this high level of activity. Viewings are mainly for properties at the higher end of the market, family homes in the £1100-£1200pw price bracket. Many of these enquiries are on behalf of executives from the US.

There’s also good demand for smaller properties to rent in Hampstead – one bed apartments and studios. We’re taking on more and more instructions in areas such as Camden where several new and refurbished developments are creating a lot of interest amongst applicants. These high quality studios and apartments are attracting enquiries from young professionals and students.

The Highgate rental market is also buoyant, particularly with enquiries for one and two bedroom apartments which appeal to young professionals and couples. We’re seeing increasing numbers of professional sharers, partly due to pressure on budgets but also as sharing allows renters to find a better property than they could afford alone.

Generally, availability of housing stock in both Hampstead and Highgate is good at the moment and the market is competitive so we would advise landlords to look at reasonable offers and also consider other factors – the calibre of tenant can be almost as important as the rental achieved.