The London rental market – review of 2015

Rental demand across our London lettings branches has grown substantially over the last year and the appeal of London as a vibrant place to live and work shows no sign of slowing down. Applicant enquiries across the company are up by 21% and the number of lets concluded is up 32%, with the biggest growth for properties priced at £1,000 per week or less.

The biggest trend we continue to see is the soaring popularity of new developments and we have opened three new branches in developments this year as a result – in Marine Wharf, Fulham Reach and Wapping, in order to keep  meeting this growing demand. We will also be opening a new branch at Kew Bridge in the New Year.

New transport infrastructure across London, including the opening of Crossrail in 2017, is another notable influence on the rental market, with easier transport links prompting renters to push into areas of outer London which they would once not have considered. These factors are having a real impact on the London rental market, prompting investors to look at new areas, particularly in East London, South London and West London, in search of good yields.

A key trend many of our branches have noticed in 2015 is that tenants are looking for the stability of longer-term tenancies, perhaps two or three years, with a break clause, to save them the cost and hassle of moving. Tenancy renewals are generally up significantly on 2014 and stand at an average of 64% of tenants renewing for a second year, with the average length of a tenancy now 2.3 years, another positive sign for landlords who are therefore at less risk of void periods.

Central London

Our Hyde Park branch has had an exceptionally busy year, with business up around 20% on 2014.   Properties have been letting very quickly throughout the year and sometimes applicants have been taking a property simply on the basis of the images and floorplan on our website, such is the competitive nature of the rental market here this year.  Even the summer months were incredibly busy, a time of year when there is usually a dip in demand. There has been a good supply of rental properties too which means we have been able to match tenants to suitable properties. We have seen an increase in relocation activity, both from young professionals and from students, with the lack of student accommodation prompting them to look for a privately rented property instead.

We have seen good rental demand in Knightsbridge throughout the year, coupled with good availability of properties. Tenancy renewals are up by around 10% this year, from nearly 75% in 2014 to 85% in 2015, ensuring continuity of income for landlords.   The period between April and October was extremely busy and, in particular, we experienced a bumper summer – in fact, the usual seasonal trends have not been as predictable this year as June to September were exceptionally busy months at what is usually quite a quiet time of year. Another positive trend this year has been an uptake in the number of landlords using our property management services.

In Kensington, we have seen good rental demand throughout 2015, with smaller one and two bedroom properties dominating the market.  But we have been slightly frustrated by a shortage of well-presented properties to let – the enquiries have been coming in but there hasn’t always been the stock available to meet demand.  The rental market in Kensington is very competitive and we have been finding that tenants are becoming increasingly choosy about the presentation of a property.  Pricing has remained an important issue, with value at the forefront of most tenants’ minds.  Properties that are finished to a high spec and accurately priced to reflect market conditions do let quickly, though.

Ealing has been a particularly popular area this year, with our branch based at the Dickens Yard development breaking records; the number of rentals concluded is up by nearly 60% on last year, with 2015 being the busiest since we opened our branch here three years ago. 2015 saw us move into our new on-site branch at Dickens Yard which puts us in an even better position to help both tenants and landlords.  In terms of the rental market, we have continued to see applicants pushing out to West London looking for value for money, fuelling this extraordinary growth in demand for rental properties here. To increase our presence in West London, we will be opening our branch at the Kew Bridge development in the New Year.

May 2015 saw the opening of our on-site branch at Fulham Reach, the latest development from St George. Even we have been surprised by the extraordinary demand here and interest has increased dramatically throughout the year.  Properties are letting within a few days of coming onto the market. This success has continued throughout the year with demand outstripping supply and we regularly have waiting lists of tenants ready to move in. So with still limited availability we are keen to take on new instructions. At the moment, asking rentals are £550 per week for a one-bed apartment with a riverside view and £750-£800 per week for a two bedroom property.

Rental demand is always high at Imperial Wharf and 2015 has been no exception, with properties letting very quickly, particularly one bedroom apartments.  The highlight of this year has been the completion of building works at Chelsea Creek, including a new canal which links to the river.  This has really enhanced the already beautiful riverside location and as a result, we have seen a surge in enquiries from applicants. One and two bedroom apartments are in especially high demand and we have often had waiting lists of applicants for Chelsea Creek, so again, we always welcome new instructions from landlords.

City, Canary Wharf, Docklands, Greenwich and East London

Our City branch has seen rental demand continue to increase this year. We have good stock levels, as some excellent developments have come on stream over the last year or so – some of the most popular have been Goodman’s Fields, Eagle Works, Roman House and The Heron.   Ultra-luxurious buildings like these almost create their own market and landlords are achieving rents of £525 – £695 per week for a one bedroom apartment and £700 – £1500 per week for a two-bedroom apartment.

Canary Wharf has had another bumper year, with demand far outstripping supply.   As the economy strengthens, attracting more and more professionals to the area, we expect this trend to continue into 2016.  Amongst the most popular developments this year have been New Festival Quarter and Waterside Point, both on the fringes of Canary Wharf.  The move by tenants towards locations on the city fringes has been one of the standout trends of 2015, as renters look for more value for money.  Rents remain fairly stable generally, with a typical one bedroom apartment achieving £350 – £450 per week and a two bedroom property achieving £525 – £675 per week.

The popularity of Greenwich amongst Londoner’s renters just goes from strength to strength.  Rental demand has continued to increase in 2015 but with new developments coming on stream, we have had good stocks to meet demand, with   Platinum Riverside and Hilton’s Wharf amongst the most sought-after.  This year we have continued to see renters move to the area from other parts of London and once here they appear to be happy with their home – tenancy renewals are at almost 75%, up by 30% on 2014.

A clear trend for 2016 is the growing popularity of developments east of the City.   We opened our new branch in Marine Wharf in November and we are already  receiving high numbers of enquiries even though stock is currently limited. It’s a similar story at our new branch in London Dock, Wapping which opened in the spring. Although flats won’t be available until the end of 2016, we have already been talking to landlords about letting their properties here.

 North-West London

2015 was an exceptionally busy year for us at Beaufort Park in Hendon, and in fact, we concluded more than double the number of lettings as in 2014.  Demand is exceptionally high and we have plenty of stock to meet enquiries following the launch of the Chapman and Carvell buildings. We expect these positive trends to continue in 2016 – properties have been letting quickly, particularly one bedroom apartments, and enquiry levels have grown year on year since the development launched.  At the moment one bedroom apartments at these two new buildings are achieving around £1400 per month, with older one bedroom apartments achieving £1,300 per month.

Our Highgate branch has had a good year, with plenty of applicants, particularly for one and two bedroom properties. Rents have increased by 3% – 5% on 2014 which is good news for landlords. As with most other branches, we have seen some of the highest demand for apartments in new developments, the most popular in the area being Woodberry Park, Highbury Stadium and Barnsbury Place. There has been a shortage of housing stock generally though compared to 2014 so we are actively looking for new instructions.

This has been an excellent year for our Hampstead branch, with the first three-quarters of the year our most successful ever. Demand has been good and despite economic and political uncertainty around the world, the area of Hampstead seems to weather the storm, with continued interest from executives choosing to relocate. In fact, in 2015 we have seen a noticeable increase in relocation activity, particularly for professionals with sizeable budgets looking for high-end homes at £2,000+ per week.  Tenancy renewals are up slightly too at around 80%.