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The London Rental Market – November 2016

We continue to see a thriving rental market across our 16 London branches; in fact, we’ve just recorded our most successful September ever with a record number of transactions.

Demand for rental accommodation in London remains high, with overseas professionals continuing to relocate to London while applicants from the rest of the UK are also moving to the Capital to pursue their careers. A not-surprising trend we are seeing post referendum, is the move towards tenancy renewals (two and three years) with 91% of tenants renewing their tenancy agreements in many areas last month. This suggests that applicants are prioritising stability, preferring not to incur the cost and inconvenience of moving home without good reason. Looking at one year ago, the picture was quite different with tenancies in the City and Docklands area averaging 12 months.

Central London

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Three bedroom apartment at Merchant Square, Paddington

The market for one and two bedroom apartments in the Hyde Park and Paddington areas has been strong, as has the upper end of the market which is seeing senior corporate applicants looking for two and three bedroom apartments for £1000+ per week. Fitzrovia and areas bordering Hyde Park such as Lancaster Gate remain sought-after. The relocation market is dominated by applicants from Asia, particularly China and Japan. They often prefer a period property but with a high spec, contemporary interior. Those looking for a new property development are enquiring about Paddington Exchange which launches soon – here a one bedroom apartment is expected to achieve £500 – £625 per week and a two bed £800 – £1000 per week. An interesting trend is the increasing number of graduates taking unpaid or low paid internships who are therefore still financially dependent on parents to pay their rent. They have good budgets, renting one bedroom properties priced from £450 per week and two bedroom apartments at £600+ per week.

Our Kensington office also reports a strong local market for this time of year and we have been receiving a lot of serious enquiries from applicants. Many are putting an offer in on a property immediately if it is well presented. The majority of enquiries are from young professionals looking for one bedroom apartments and families looking for three bedroom properties. We’re seeing an increase in the number of tenants requesting two or three year tenancies here, suggesting that many are now making longer term plans.

Rentals are strong at Fulham Reach and we are receiving plenty of enquiries, particularly for two bedroom apartments which are currently averaging £750+ per week. In fact, demand continues to outstrip supply and we have shortages of stock, with waiting lists now of fully-referenced tenants waiting to move in when more apartments become available at the end of November. Around 70% of existing tenants are renewing their tenancies here, so this puts further pressure on stock. We do also have high-specification apartments at nearby Harrods Village in Barnes and Glenbrook in Hammersmith and these are letting well.

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One bedroom apartment at Chelsea Creek

Demand continues to be strong at Imperial Wharf, particularly one bedroom apartments (£450 per week) and studios (£400-£450 per week) which are popular with young professionals and wealthier students. Applicants seem to have good budgets and the relocation market has come back strongly here, with executives relocating to London from the Middle East and Far East leading the field. Demand has picked up at Chelsea Creek and one bedroom apartments are letting for upwards of £465 per week and studios over £450 per week.

After a bumper September, property rentals in Knightsbridge have seen a slight seasonal dip, as we would expect at this time of year. Landlords who are prepared to negotiate with tenants and be flexible are seeing their properties letting well though. We are taking on a number of new instructions, particularly high-end two and three bedroom properties priced from £1,550 to £1,895 per week.

Our newest branch in Nine Elms reports that interest is growing in the recent Barratt scheme at Nine Elms Point and we expect enquiries to increase further when the much-awaited apartments at Battersea Power Station complete later this year. With many new apartments coming on stream at the same time, we are recommending to landlords that they pay particular attention to presentation and furnishing to ensure their apartment stands out from the competition and to contact us if they are looking for a furnishing package to make their property stand out.

Rental demand is very high in Ealing where the Dickens Yard development remains extremely popular. Apartments at Dashwood House, the latest building to launch, are letting quickly and we already have fully-referenced tenants waiting to move into apartments in the next phase, Fitzroy House, which completes soon. It looks like tenants are really doing their homework and registering their interest early so that they don’t miss out when properties roll out.

Our branch at Kew Bridge is exceptionally busy, with properties letting quickly, both at the Kew Bridge development itself and throughout the wider Brentford area. One and two bedroom furnished properties are in highest demand, with one bedroom apartments in the development achieving £350+ per week and two bedroom apartments £475+ per week. The corporate market is strong and most applicants are senior professionals. Older properties are also in high demand throughout Brentford, with one bedroom properties achieving £300+ per week and two bedroom properties £400+ per week. We are receiving new instructions in Richmond and these properties too are letting quickly. Our biggest challenge here is not having enough smaller properties to let.

City, Canary Wharf, Docklands, Greenwich and East London

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Two bedroom apartment at Millharbour, Canary Wharf

Rental demand across the City, Canary Wharf and East London remains buoyant. We are seeing a high level of enquiries in the City, particular from professionals working in the banking and finance sectors. However we are experiencing a shortage of keenly-priced properties and are actively looking for new instructions. Tenants’ budgets are good and properties are achieving close to asking rental. Demand is also good in Canary Wharf but again stocks are now running low. One bedroom apartments are achieving £375-£475 per week and two bedroom apartments £450-£650 per week. Three bedroom apartments, popular with professional sharers, are achieving £550-£800 per week.

With new developments launching in Wapping and Surrey Quays, we have good stocks in these areas. The first phase of the new London Dock development in Wapping launches in December/January 2017 and we expect demand to be high. Tenants’ expectations are increasing and with each new development that launches, developers are raising the bar – London Dock boasts its own squash courts as well as a gym, spa, golf simulator and cinema, meeting demand from applicants who expect ever more for their rent.

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Three bedroom apartment at Marine Wharf

At Surrey Quays, we are seeing good demand from professionals working in the City and Canary Wharf as well as those working in the tech and start-up sectors at Old Street and Shoreditch High Street. Apartments are more affordable at £365-£395 per week for a one bedroom apartment, £425-£475 per week for a two bedroom apartment and £550+ per week for a three bedroom apartment. Over the river in Greenwich demand is also good, with properties continuing to let quickly due to slightly lower rents and an easy commute to the City and central London, as well as its parks, restaurants and cafes. Again, we are running quite short on stock in these areas at the moment. New Capital Quay is one of the most consistently popular developments with applicants.

We are starting to see applicants’ priorities changing – most still prefer to be within a 10 minute walk of a Tube, DLR or Overground station but will now move further out if the rent is cheaper. Reducing accommodation costs remains very important. Another top priority now is superfast, fibre optic broadband and most applicants ask about internet speeds before viewing a property. Immaculate presentation is a given and many tenants request outside space such as balcony.

North London

We are seeing strong demand for high-end rental properties in Hampstead and have been finding homes for a number of senior executives with generous budgets, mostly three and four bedroom family homes between £1,500 to £2,000 a week. Many are requesting two or three year tenancies, indicating they are moving to London long term. We are also receiving plenty of new instructions for properties in the £1,800 to £3,500 per week price bracket, as many clients who were planning to sell their properties are now renting them out instead, waiting to see how the market fares post Brexit. This is boosting the rental market, ensuring there are plenty of high end properties to meet demand. There is also consistently good demand for one and two bedroom properties, with asking rentals of £400-£500 per week for a one bedroom apartment and £500-£800 per week for a two bed. Generally there is good availability of stock and plenty of enquiries.

Our Highgate branch reports a flurry of activity over the last few weeks and we are replenishing stocks by taking on new instructions. One and two bedroom apartments remain in particularly high demand with young professionals who often prefer the high specification and amenities of a modern development and North London property developments such as Woodberry Park, Highbury Stadium Square and Barnsbury Place are among the most popular, where rental demand is always high.

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Goldhawk Apartments

There is strong requirement at Beaufort Park in Colindale, particularly for one bedroom apartments – the Goldhawk apartments completed recently and we let most of our stock almost immediately. The Golding apartments are completing at the moment and again, demand is high, with properties letting as they become available. Having a branch on-site at the development ensures we can react quickly for viewings and getting on top of tenant queries. Typical asking rentals in both these buildings are £340 per week for a one bedroom apartment and £420-£440 for a two bedroom apartment.

If you have a property to let in any of these areas, or would like a free no-obligation rental valuation of your property please do get in touch with us. For more London rental market news and updates, subscribe to our newsletter.

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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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