Demand for rental properties in London continues to grow and many of our branches are very busy at the moment. With many of us ‘staycationing’ this summer rather than going overseas on holiday, people have more time on their hands to search for their new home.
Most of these enquiries are coming from tenants who already live locally in London and who wish to simply find somewhere with more space, as they expect to be working from home, at least for some of the time, for the foreseeable future. More outside space is another priority as we all take a fresh look at our homes now that we are spending more time in them. And many people are also looking to find a similar or high spec apartment for a cheaper rent.
It’s clearly a tenant’s market right now though and this is presenting a new set of challenges to landlords. Airbnb apartments have been flooding the market recently and many tenants packed their bags and moved home at the start of the lockdown, creating a surplus of housing stock in London. But with the situation easing, applicants are now serious about moving – they tend to view up to five properties and then make an offer but with so much choice, they will take another apartment if the landlord refuses to negotiate – so flexibility remains key.
The rental market is extremely price sensitive right now. Accurate pricing is therefore key if landlords wish to let their property as quickly as possible. While it goes without saying that the properties letting most quickly are those with the highest spec and the most stylish presentation, landlords must be willing to be flexible on price to ensure their property lets quickly.
If you have any questions about how you can ensure your rental property lets as quickly as possible in the current market, please contact your local Benham & Reeves manager – all our managers are either working from their usual office or from home and can be contacted on the usual telephone numbers.
Rental demand from international students remains low. Some students already living in London are moving locally to take advantage of the wide choice of rental properties available but we are only seeing a trickle of enquiries coming in from overseas students for the new university term. These are coming in to us remotely but it does show that students are still looking for accommodation for when their course starts but they are just not yet in a position to make a firm offer until the picture becomes clearer.
We do understand that some universities are conducting this term’s lectures online and looking at starting lectures ‘in person’ from January 2021. This means that we could see an influx of students later on in the year, perhaps in November or December, ready for the start of term in January. We will keep you informed as to how rental enquiries are progressing.
Our City and East London branches (City, Canary Wharf, Surrey Quays, London Dock, 250 City Road) branches are all reporting good tenant demand, with enquiry levels up noticeably from last month. Most are professionals already living locally, rather than international professionals or students. Many branches are reporting that the number of new tenancies being concluded is similar to this time in 2019. What has changed, clearly, is that rents are down – by 10% – 30% – due to the surplus of stock.
The only exception to this is two bed apartments and we have limited stocks of these as we are again seeing an increase in the number of professional sharers. For example, many of our applicants looking for a property at Surrey Quays are now looking for two or three bedroom apartments. Just a couple of months ago, many professionals were reluctant to share because of the risk of spreading Covid 19 but now the desire to reduce accommodation costs has become more pressing again.
And while well presented properties are letting well generally, applicants are aware that they are in a strong negotiating position. So we would recommend landlords be prepared to negotiate – at the moment it is more important to find a good tenant at a lower rent rather than risk a void – until the outlook improves.
In Kensington, Knightsbridge, Hyde Park and Nine Elms, we are seeing more enquiries coming in now and there is real evidence that the crisis is settling down a little. August was busy at our Kensington branch, for example, with a dramatic increase in the number of applicants with larger budgets – £900 – £1000 per week and a noticeable uplift in activity. Senior professionals with larger budgets have not been as affected by the lockdown as more junior staff. Enquiries in this price bracket were virtually non-existent a month ago so this is a dramatic upturn. Many corporates locally are upgrading to a larger or higher spec apartment and an improvement in their own living space but again, applicants know there is plenty of choice so the market is extremely price sensitive. So we would urge landlords to remember that they cannot hold on to last year’s rents but should listen to their letting agent for the latest market news so that their apartment can be accurately priced in line with current market conditions. Currently, rents are down by around 10% but the market does see a correction from time to time, for all sorts of reasons, and we are confident rents will increase again when the crisis ends.
Our Hampstead and Highgate branches are seeing demand pick up again, with enquiries coming mainly from local residents who wish to upgrade to a larger or more luxurious home. Around 70% of applicants right now are telling us they are looking for a home with more space – inside and out. And of course, they are also looking to save money by negotiating a lower rent – either on their current property when the tenancy ends or on a new property. So accurately priced properties are letting well. Again, negotiation is the key. Tenants tend to make multiple offers on different properties and choose the one which offers best value.
Over at Beaufort Park in Colindale, demand is also picking up a little – most enquiries are from professionals already living locally and we are seeing some students making enquiries (Middlesex University is nearby) but not on the same scale as 2019.
Rental demand is picking up at our West London branches, in Dickens Yard, Ealing, Kew Bridge in Brentford and Imperial Wharf. Enquiries are coming in from corporate tenants already based in London or other parts of the UK, now that some businesses are back open for work, at least for some of the time. There are a handful of enquiries from overseas professionals, relocation agents and students, including several applicants planning to move to the UK from Turkey who asked us to find them homes at Kew Bridge.
We’ve also let apartments at Dickens Yard to several Japanese professionals who are relocating to the UK. And we found a penthouse at Dickens Yard for a professional living in central London who realised his £4k per month budget would buy him more space and a higher spec in Ealing. This is another trend we are noticing, with some professionals wishing to move to a new area where they can better value and more space. Generally, budgets are lower so flexibility is essential to let a property quickly. Most of our landlords understand this and are happy to take our advice on how to proceed at the moment.
If you have a property becoming available soon for rental and would like an up to date appraisal of what rent you can expect, why not ask us for a valuation. Or talk to one of our branches. Contact us.
View all posts by Anita Mehra