Rental demand in London is really bouncing back now and has reached pre-pandemic levels in most areas. You may have seen our recent press coverage about the return of international students, the reversal of the working from home trend and the return of professionals from overseas and from other parts of the UK which are all contributing to this urban revival. In fact, in many areas of London, we are seeing so much pent-up demand that we are receiving unprecedented levels of enquiries and we simply do not have enough stock to meet the needs of current applicant enquiries.
What a dilemma to be in for a letting agent. Staff at the ready. Tenants registered and not enough property to go round! We are extremely short of stock at most of our London branches and some have let all their available apartments so please get in touch if you have a property to let now or becoming available soon.
Read our media coverage in The Daily Mirror, one of the UK’s biggest newspapers for more information about the acute shortage.
Strong demand from international students
With many international students having deferred their courses for the last year, there is now high demand from students keen to come to London and experience university life. As a result, demand from students is now extremely high in many areas and some have left their decision to the last minute and this is adding to the current high demand too.
Rents now back to pre-pandemic levels
As a result of the city-wide shortage of high-quality rental accommodation, rents are generally back to pre-pandemic levels or close to them, and these growing shortages of stock are putting landlords in a much stronger position than they have been in for some time. For example, in the City, one apartment that was on the market a couple of months ago for £400 per week, has just been let for £600 per week – its pre-pandemic asking rent. The City of London was possibly the hardest hit during the health pandemic so we need to understand the context as other parts of London in zones 3 and 4 have only seen marginal rental drops and are already back to normal levels.
New rental instructions needed throughout London
The City and East London
Rental demand at our City and East London lettings branches is very high. Working professionals have been returning to London over the summer, many to their existing jobs, but there has also been a lot of new job creation so employment opportunities are growing too, generating interest among workers looking to move to London for the first time. Our branches in Canary Wharf, Surrey Quays, Wapping, Shoreditch and Woolwich all report high demand at this time.
In some parts of East London, the rush to rent properties is so great that we have seen the return of gazumping – with tenants trying to outbid each other, and put in a higher bid than another applicant that has already had their offer accepted.
Favoured residential developments in the City at the moment
include Postmark London in Farringdon WC1 and One Crown Place in EC2. In Canary Wharf, South Quay Plaza remains very popular, as does Landmark Pinnacle where landlords are seeing strong demand and rents are good. The latest phase at Cashmere Wharf at London Dock has just started completions and we have good levels of enquiries for these apartments.
At 250 City Road in Shoreditch, demand is also very high and shortages of stock are a serious issue. The good news for landlords is that this means that rents are now increasing compared to pre-Covid rates. All the apartments at Carrara Tower have now completed and are now occupied and we expect most tenants to renew so we are likely to see further shortages of stock. Demand is increasing from overseas professionals, particularly Japanese business professionals who are being looked after by our Japan Desk. We are also seeing a real upturn in enquiries from international students.
South London and Nine Elms
At Nine Elms neatly positioned between Vauxhall and Battersea, our lettings branch situated opposite the new Nine Elms Tube station is reporting similar shortages of properties. They are very busy with enquiries from professionals (moving to London from overseas and the UK) and they are also seeing a return of international students returning to London. Med students from the Imperial College who deferred their university places last year are returning, together with this year’s cohort, so the number of applicants is high and when we have stock we let it immediately. Some students are increasing their budgets in order to secure a property. But at the time of writing this, our branch had only three apartments available to rent and the earliest available was in October.
There are some new apartments becoming available at Embassy Gardens later in September while a new block, The Modern, will be completing soon and we expect demand to be high here too. Unsurprisingly, rents generally throughout this part of South London are now back at almost pre-pandemic levels and we expect rents to rise further as professionals continue to return to London.
North & North West London
Our Colindale branch at Beaufort Park is also extremely busy and almost all the branch’s properties are now under offer and our stock levels (at the time of writing) were zero. Generally when a property comes onto the market it lets fast and now its the same day. As well as seeing high demand from overseas students and domestic professionals, we continue to see growing numbers of enquiries from Hong Kong nationals coming on the BNO visa scheme, these are individuals and small families who really like the sense of community in the area.
Enquiries are also picking up in Hampstead and Highgate where we have more traditional stock but enquiries for modernised accommodation are more in demand. Pristine kitchens and bathrooms, wood floors and even fast broadband are high on the wish-lists. Corporates are returning slowly and as the market picks up in these areas, we do expect to see rents return to market levels.
Fringes of West London, lettings really picking up
In West London, our Ealing and Kew Bridge branches are extremely busy and again, have very few rental properties available to rent. There are noticeably more enquiries from relocation agents now and many overseas professionals who left London last year are now returning. Large companies along the M4 corridor are now back on the look-out for high quality homes for their executives coming on 2-4 year secondments. The challenge is continually not having enough stock to meet the demand,
We are also seeing high numbers of enquiries from BNO passport holders from Hong Kong. New developments in Harrow such as Eastman Village are letting very well and we are waiting for the next phase here to complete while in Southall, at the Green Quarter, the first two buildings are now occupied and we are also waiting for the next phase to complete.
Further rental market analysis
Clearly, we couldn’t be in a more different situation to the difficult market that we found ourselves in in 2020. And as travel restrictions continue to ease, albeit gradually, and workers return to their offices, landlords are now feeling more confident in their ability to boost their rental yields.
If you are interested in buying an investment rental property at this time, please talk to us as there are many good opportunities at the moment, many are off-market, so please do contact us for further details.
Call us for a free rental appraisal
If you would like us to provide a free rental appraisal of your London property, please call your nearest Benham and Reeves London branch or international office who will be happy to assist. Our appraisals are free even if you already have a different agent appointed.
View all posts by Anita Mehra