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The London rental market – October 2017

September has seen rental demand in London forge ahead. Our 16 London lettings branches are reporting continuing high demand and while the busy ‘student season’ is now nearing an end, we are again seeing increasing numbers of overseas professionals relocating to London. What is particularly interesting is that these professionals are not just from Europe. Brexit uncertainty means the number of Europeans moving here is down a little but to compensate for this, we are still receiving above average enquiries from professionals moving to London from other continents and countries. Professionals from Asia, the USA, South America and Australia all figure highly in our enquiries while we are also seeing growing numbers of Chinese and Japanese applicants too.

Battersea Power Station

The reality is that the UK – and the London economy – are thriving and with that success come professionals from around the world to work in its growing industries. For example, Google is investing £1bn to develop its new London Head Quarters in Kings Cross. Apple took 500,000 sq ft of Battersea Power Station to house 1400 staff – their biggest campus outside the USA, Facebook has moved into its new headquarters – their largest base outside the USA and Amazon’s new office at Principal Place between Liverpool Street and Shoreditch will house more than 5,000 employees. In addition, there are also around 4,000 tech start-ups near ‘Silicon Roundabout’ near Shoreditch. And as these professionals flock to London, rental demand continues to grow, outstripping supply. 46,500 new builds have been completed this year, but this still falls far short of the 64,000 new homes that are needed to keep pace with demand. In fact, The Royal Institute of Chartered Surveyors (RICS) suggests there will be a shortfall of 1.8m new rental homes by 2025. So rental demand in London is strong – there are plenty of applicants looking for high-spec homes in good locations. If your rental property is sticking, we can advise you on ways to enhance its appeal to London’s discerning professional tenants. For more information, call your local branch manager who will be happy to advise you.

Central London (Hyde Park, Knightsbridge and Kensington)

Our Hyde Park branch has seen rental demand increase significantly recently and the market is buoyant. Studios, one, two, three and four bedroom properties priced from £300-£1,500 per week are all letting well although unfurnished 3 bedroom apartments are slower than we would like. Much of this demand has been from international students but now, as the student season comes to an end, we are again seeing increasing numbers of local professionals moving home, ready for a change.

Overseas professionals relocating to London are also a driving force behind the strong rental market. These tend not to be from Europe but from other parts of the world – the US, South America, Australia, Asia and South Africa. Budgets are good but it is a tenants’ market. Applicants know they are in a good position to negotiate. Most landlords are agreeable to this to ensure a property lets quickly. As ever, new developments remain a favourite with applicants looking for a high spec and good amenities.

2 bed apartment at 375 Kensington High Street

In Kensington the rental market has been so strong that we are starting to see shortages of some types of stock. One bedroom apartments priced at up to £500 a week are literally being snapped up while two bedroom apartments priced up to £600 a week are also letting very well. Most properties are letting after just one or two viewings. As ever, new developments such as 375 Kensington High Street are in extremely high demand and we have currently let all our available properties there. The relocation market remains important and we continue to see professionals moving to the area as they take up new jobs in London. Enquiry levels have been incredibly high at our Knightsbridge branch during September, with demand strongest for studios and one bedroom apartments. Much of this demand has been fuelled by high numbers of students looking for a rental home before the start of the new university term. Also on a positive note, we are seeing much more movement in the rental market in Knightsbridge now as landlords recognise that they must be prepared to be flexible and negotiate with tenants in a competitive marketplace, encouraging greater activity in the market generally. With more new builds accessible to tenants, landlords with traditional conversions need to make sure their property is offered in tip-top condition and contemporary style. We can help provide furnishing packages and refurbishment services to any investors who need some guidance here.

West London (Ealing, Kew/Brentford and Hammersmith)

2 bed apartment at Fulham Reach

We are now receiving new stock at Dickens Yard in Ealing, with the launch of the Vista Apartments. These new apartments are letting almost as soon as they become available, some being snapped up by Japanese corporate tenants with young families who move to the area because they wish to be close to the Japanese School in nearby Acton. Corporate tenants love the high spec, underground parking and other amenities at the development and its popularity goes from strength to strength. At nearby Kew Bridge in Brentford, we have been letting properties extremely quickly, almost as soon as they become available. As a result we are now running short of stock and are looking for new instructions. Many applicants are looking to sign two-year tenancies, rather than one year, as they prefer having the stability of a longer tenancy. The development is popular with a mix of applicants, young professionals and families, from London, other parts of the UK and overseas. Our Fulham Reach branch in Hammersmith has had an extremely busy month and one bedroom apartments in particular have been flying out while two bedroom apartments are also letting well. The development remains popular with young professionals who enjoy its high spec and rhttps://www.benhams.com/contact/hammersmith-letting-agents/iverside location while still being only a short commute from central London. Interest is also increasing in nearby Queen’s Wharf, particularly for studio apartments which offer good value for money. With such high demand locally, we are also now looking forward to receiving new instructions at Sovereign Court, with new apartments completing towards the end of 2017.

South-West central London (Imperial Wharf and Nine Elms)

Rental demand at Imperial Wharf and Chelsea Creek, both in Fulham has been extremely high and the phones simply haven’t stopped ringing over the last few weeks! We are now out of stock of one bedroom apartments and have low availability too of studio apartments. With no small apartments available, some applicants have been taking two bedroom apartments instead as the price differential is relatively small. With rental properties in such high demand here, many applicants requesting longer-term tenancies – usually two years – so that they can lock into their current rent and maintain longer-term stability. Landlords, also keen to retain good tenants, are usually happy to do this. South of the river at Nine Elms, enquiries from applicants are surging ahead and apartments are letting extremely quickly. The area is really gaining in popularity now and although it can be unfamiliar to applicants at first, once they realise they are only a short walk from central London, they quickly appreciate the location and the superb value offered by properties here. The development of Battersea Power Station, the new US Embassy and new Apple HQ are all helping to give Nine Elms its own very easily identifiable identity too. More apartments at Nine Elms Point are coming on stream now and interest for this good-value Barratt scheme is really upping pace. For more information on this scheme, watch our video guide here.

City, Docklands and East London (City, Canary Wharf and Wapping/London Dock)

2 bed apartment at 190, Strand

As expected, we have seen strong rental demand in the City, Canary Wharf and East London over the last quarter and fortunately we have had good stocks to meet demand. To some extent, the rental market is polarising. Demand for luxury five star developments in the City and Wapping is high – in particular we have seen a huge uptake from international students. Meanwhile, those with lower budgets continue to look further east in search of value, trading a slightly longer commute for a lower rent. Many of the most popular developments are to the east of the City fringes where buildings with a good choice of amenities and particularly a 24 hour concierge – a service which is fast becoming a key requirement – can be found at affordable rents. We have also had an excellent response to Goodman Fields where we have let all our available properties in the latest phase. We continue to receive enquiries and are looking for more stock.

Our London Dock branch over in Wapping is also doing brisk business, with demand rocketing over the last six to eight weeks. We have let all our properties here (usually at very close to asking rental) and again are looking for more stock. Rental demand is equally high in Canary Wharf and apartments are letting well, with minimal voids. An interesting trend amongst applicants seeking high-spec accommodation at a good price is the move towards renting an apartment in a new, luxury development still under construction where rents are typically 10% to 12% lower to compensate for disruption from ongoing building work. This is an opportunity to move in early, before the development completes and rents may rise, fuelling demand in developments such as Royal Wharf, a landmark development in E16 which is still being built so offers lower prices than will be available on completion.

South East London (Surrey Quays and Greenwich)

The last quarter has been exceptionally busy for our Surrey Quays branch with the remaining apartments at Marine Wharf (Endeavour House and Quentin Court) letting very quickly. We have a few units remaining but generally we are now very low on stock although enquiries keep coming in. Apartments are achieving full asking rental. Over in Greenwich rental demand remains consistently strong and in Woolwich, Royal Arsenal Riverside is also very popular. A Crossrail station is due to open here in 2018 and we are now seeing applicants moving here as they recognise that commute thttps://www.benhams.com/contact/canarywharf-letting-agents/imes will reduce even further in just a few months’ time – for example, Canary Wharf will be just eight minutes away – yet rentals still offer excellent value for money but are likely to rise next year.

North/North West London (Hampstead, Highgate and Colindale/Beaufort Park)

5 bed house in Golders Green

The rental market in Hampstead is steady, with one and two bed apartments letting well – generally, young professionals with budgets of up to £800 per week are fuelling this demand. Tenants have a good choice of properties at the moment so it is the exceptionally well presented apartments which are letting most quickly. Generally landlords recognise the challenges of the current market and are prepared to negotiate in order to secure a tenant quickly or to retain an existing tenant, even if it is at a slightly lower rent than anticipated. Applicants also continue to be drawn to the high spec and facilities of a new development – a gym, pool, parking and concierge are at the top of many wish lists. With few of this type of development in Hampstead itself, many applicants are also now looking to neighbouring areas such as Kilburn and Queens Park to find the type of property they want. In nearby Highgate we have had a frantic couple of weeks and let most of our properties so are now looking to replenish our stock levels. Again, one and two bedroom apartments are in highest demand and applicants continue to prefer the high spec, contemporary interiors offered by developments such as Highbury Stadium Square and Woodberry Park. Larger family homes are letting well if they have a realistic rental and offered in excellent condition.

At our Beaufort Park branch in Colindale rental demand has been exceptionally strong, even busier than usual at this time of year. Students have been driving this demand recently but we continue to see plenty of enquiries from local professionals too. Studios are in extremely high demand and we have none left at the moment while one bed apartments are also letting very quickly, as too are two bed properties which are popular amongst sharers looking to economise by renting a property together.

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 contact 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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