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Rental Market Update – October 2013

Central London

Rental demand is good across our central London lettings offices, who are all reporting that they are busy with enquiries from applicants looking for rental properties in Knightsbridge, Kensington and Hyde Park.

Hans Crescent New Development
2 bed flat in Hans Crescent, £1,200 pw

Our Knightsbridge office is particularly busy with young professionals looking for one and two bed rental properties. Many tenants are renewing their tenancy agreements which is leading to a shortage of good properties in some areas so we are actively looking for new instructions.

It’s still a tenant’s market though and with accommodation budgets under pressure, landlords must be prepared to negotiate with tenants on rental price. Applicants are taking their time when making a decision on where to rent and sometimes the landlord needs to meet them part way and be flexible to ensure their property lets quickly. Applicants have high expectations. They are familiar with the high quality finish of a new build development, and often expect a similar standard from all properties. Landlords need to consider this and maybe think about refurbishing to ensure their property meets the grade.

 

ealingoffice
Ealing Office

Our Ealing office is about to celebrate its first anniversary and its first year has been extremely successful. We’re very busy with enquiries and demand is strong, both at Dickens Yard and other new residential developments in West London such as Dickens Yard, Kew Bridge, Napier at West 3 and West 3 in Acton. These all offer exactly the type of property that tenants are looking for, and apartments here are letting instantly. Again, we are always looking for new instructions at these developments. Over 80% of tenants are staying on when their tenancy agreement comes up for renewal, an astonishing figure. We’re attracting high calibre tenants and landlords are achieving yields of 5%-6%.

City, Canary Wharf and Docklands

Silkworks development, Lewisham
Silkworks development, Lewisham

We’re continuing to see increasing demand for apartments to rent on the fringes of the City and Canary Wharf. Young professionals and graduates in particular are drawn to areas to the north of Canary Wharf like Bow and Poplar and areas to the south such as Greenwich and Lewisham. These areas offer easy access to Canary Wharf and the City, yet rents are lower here, offering tenants better value for money and allowing them to reduce accommodation costs and save for a deposit on their own property at some point. High demand for rental properties in these areas of East London is pushing up rents more quickly than in other traditionally more affluent areas like Canary Wharf itself. As a result, landlords here are currently achieving yields of over 5%.

One and two bed apartments remain the most sought-after accommodation in the wider East London area but we’re also seeing increasing numbers of professionals choosing to share three bedroom apartments to save money. We’re also finding that developments with their own concierge service are very popular and let quickly. It’s a service that busy professionals really value so they’ll often check that a building has a concierge before viewing – so that might be a factor to consider if you’re planning to buy a rental property in East London.

Regeneration in East London is also having a ripple effect on the popularity of the area, fuelling greater rental demand. The new Westfield Shopping Centre in Stratford, new bars and restaurants and excellent transport links are all making East London a sought-after place to live in its own right, in part adding to the higher rent increases year on year than you’ll find in other traditionally more popular areas of London.

North/North West London

At the moment, two bed apartments in Hampstead are the most popular type of rental property amongst applicants. The market is being driven by young singles and couples, looking for homes ranging from £400-£600pw.

With children settled back in school, the market for larger family homes in Hampstead is quieter, as we’d expect at this time of year. The market is changing – there are fewer corporate tenants now than over the summer but we’re receiving regular enquiries from relocation agents, mostly searching on behalf of young professionals rather than families. Nearly half our existing tenants are staying on when their tenancy agreement comes up for renewal. But overall, the rental market in Hampstead is steady – prices are stabilising and are reaching realistic levels. We have a good level of instructions at the moment together with good steady enquiries.

We’re finding that the quality of images, floorplans and videos is becoming even more important. Applicants expect to see good quality property details before they decide to view a rental property so we have taken on an in-house photographer to ensure that our marketing materials give them exactly the information they need.

At our Highgate office, demand for one and two bed properties is high, with young professionals and couples driving demand, while the market for larger properties has slowed. New developments remain extremely popular, particularly Highbury Square and Woodberry Park, where apartments continue to let very quickly and are popular with professionals such as doctors, lawyers and bankers. The relocation market remains busy, with enquiries at a good level. Applicants know what they’re looking for and when they see a property they like, will make an offer quite quickly.

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About the Author

For 35 years Anita has been the driving force behind Benham and Reeves’ success as it has grown from a single branch in Hampstead, to one of central London’s oldest, independently owned sales, letting and property management companies. Anita's vision has driven the expansion of the business to offer a complete range of property investment related services from under one roof, from purchase to handover, furnishings and/or refurbishment to lettings and property management. Read more about Anita Mehra here - Read full profile

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