Rental Market Update – May 2014

Central and West London

Rental demand is high for one and two bed apartments in Knightsbridge and these smaller properties are letting quickly.   Applicants are demanding and levels of expectation are rising.  They’re familiar with the property specs found in new developments and they expect this standard of presentation from rental properties generally.

Whether an applicant is looking for a studio or a larger property, presentation must be first rate to attract a tenant quickly.  The entrance of a residential building is equally important and tenants can be put off by shabby communal areas.  Landlords who own a period conversion should consider joining forces with other owners to smarten up communal areas if necessary.  It’s worthwhile investing in good quality furnishings and presentation to ensure a property lets quickly.

When choosing a rental property in the SW3 postcode, a convenient location comes high on many tenants’ wish lists too and they prefer a property close to a underground station to reduce their daily commute.   Properties further than 10 minutes from a Tube station are slower to let and applicants will compromise on the square footage of a property or its amenities if the location is good.  It’s all a matter of applicants’ lifestyle choices.    Tenants are also very price conscious.  They believe this is a tenant’s market and they are prepared to negotiate hard to reach an agreement that is acceptable to them.  Landlords who are prepared to negotiate a bit will find their property lets more quickly.

Just a few miles west to Ealing, rental demand at the Dickens Yard property development is high, with the corporate lets market particularly active with younger executives.  Here, budgets are also an issue amongst renters who are looking for value for money and more space than they can find in a Zone 1 rental property.  Shortages of smaller (one and two bedroom) properties are not uncommon here now and we currently have a waiting list for one and two bedroom apartments in the new building, Skyline, which launches soon.   The good news for landlords is that this means void periods are minimal.  We also have high demand for nearby developments such as Kew Bridge and Napier West 3 in Acton.

City, Canary Wharf, Docklands and Greenwich

It’s been a very busy few weeks in East London, from the City, Canary Wharf and Docklands, out to Greenwich and Blackheath.  We’re seeing increasing numbers of enquiries from relocation agents and there’s high demand for apartments with rents priced up to £600 per week in the City.  One bed apartments up to £400 per week always let quickly while the number of professional sharers looking for two bedroom, two bathroom apartments at £550-£600 per week is on the increase too.  Many are planning to purchase a property so are reducing accommodation costs to save towards a deposit. New build apartments are letting quickly, within two viewings at most.

Converted buildings are also popular right now. A lovely converted wareshouse in Princelet Street E1 is incredibly popular – it has a more corporate feel to it than some of Shoreditch’s other warehouse developments so is appealing to City traders and executives.  Situated just off of Brick Lane, commuting is convenient with just a 10 minute walk to Liverpool Street and easy access to Canary Wharf by Tube.

Over 75% of tenants are currently renewing their tenancies at the moment, seeking to avoid the hassle and expense of finding a new property.  Clearly renewing an existing tenancy saves tenants money while landlords minimise void periods so it’s a win-win situation.

Demand is equally high south of the river in Greenwich and Blackheath and the influx of young professionals moving to the area continues to gather pace.  Demand is so strong that we already have referenced tenants waiting to move into the next phases of apartments at developments like New Capital Quay, The River Gardens and City Peninsula.  These developments are so popular that, if an apartment isn’t available immediately, tenants will usually wait until one comes up. Five years ago we didn’t used to see these trends but today’s tenants seem more knowledgable about where they want to live. Fortunately, having local lettings offices in these locations helps a great deal.

North/North West London

We’ve seen quite an increase in rental enquiries for Hampstead and Highgate rental property, particularly from relocation agents.  One and two bedroom rentals properties in Hampstead are always in high demand but now enquiries are picking up again for larger family homes.  Many of these enquiries are on behalf of US and European executives, keen to move before the start of the September school term.

Demand for properties with outside space is reaching a peak, most applicants at this time of year are looking for a garden, a balcony or a terrace.  Of course, properties close to Hampstead Heath continue to command a premium.

The rental market remains competitive and price-sensitive though so we advise landlords to be flexible about rents.  A good quality, long term tenant paying a lower rent is a better option than a tenant paying more who moves after six months.  We’re seeing an increase in the number of tenants choosing the stability of a two or three year lease (with break clauses) and this is an excellent option, giving longer term security to tenants and landlords.

Across in Hendon, at our lettings branch at the Beaufort Park property development, we’re continuing to see strong demand from young professionals for this highly popular development which has a nearby Tube station taking you into Bank station in just 25 minutes. We have good stock levels at the moment but apartments are letting quickly.  The residents’ spa and gym is a real draw for many, offering the same quality of amenities you’ll find in central London property developments but at a lower rental.