The London rental market – July 2017

Property is a long-term investment. And despite recent challenges affecting the buy-to-let market in the UK – tax changes and a slight slowdown in rental demand caused by the uncertainty surrounding Brexit and the recent General Election, we believe London property investment continues to have a sound future. It is a simple case of supply and demand. London is experiencing a shortage of housing stock while demand continues to increase – the Royal Institute of Chartered Surveyors (RICS) predicts a continuing shortage of rental properties over the coming years. Many Londoners cannot afford to buy their own homes and management consultancy PwC forecasts that London will become a city of renters, with only 40% owning their own homes, by 2025.

We advise landlords to look beyond the current uncertainties and focus on the bigger picture. The outlook for long-term rental growth looks strong – the UK economy is flourishing and London is at the heart of this success – a hub for business, education and tourism, all adding to the demand for high quality, rental properties. In terms of property prices, generally values double every 10 years.

So we believe the fundamentals of London property investment remain strong and still offer good long-term value. Our job is to help guide landlords through this current, challenging period. We are working hard with our clients, drawing on our experience of the London lettings market over the last 60 years to ensure that properties let as quickly as possible.If you would like advice on current rental market conditions, please do get in touch with one of our branches.

West London (Ealing, Kew/Brentford and Hammersmith)

The new Vista Apartments at Dickens Yard in Ealing are now launching and we even let several units before completion, such is the level of interest. We have been receiving a lot of enquiries and this new stock is eagerly awaited in order to meet the growing demand for rental apartments in west London. One bedroom apartments in the new building are letting for upwards of £370 per week and two bedroom apartments for upwards of £550 per week. The corporate market continues to be very busy at Dickens Yard, and we see a lot of Japanese corporates in particular as well as professionals from the UK. Rental demand is also good at Kew Bridge in Brentford – we are receiving good levels of enquiries and are actively looking for new instructions. Demand is particularly high for two bedroom, furnished apartments which are popular with young couples and families. Furnished apartments always let more quickly than unfurnished ones and so a modest initial investment in furnishings is usually a profitable move for landlords by helping to minimise expensive void periods. Our on-site office at the Fulham Reach development in Hammersmith is experiencing good demand with three bedroom apartments very popular with families in particular. One bedroom apartments are also popular. We have good availability of one and two bedroom apartments at Faulkner House and these are letting well. We are very low on three bedroom apartments here so are looking for new instructions. We are receiving a number of new instructions at nearby Queen’s Wharf where two bedroom apartments are letting for upwards of £700 per week. We continue to receive more stock here weekly and interest levels are really picking up due to its excellent value for money.

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

Our City, Canary Wharf and other East London offices are in the middle of the busy student season at the moment and we are receiving a lot of enquiries from students looking for homes for the start of term in September. Many are happy to start their tenancy a couple of months earlier if necessary, in order to secure the right home in the right location. Most wish to be just a short walk from their University and safety is important too so finding a development with a 24 hour concierge is essential. Super-fast broadband is also non-negotiable. Many students prefer the ease of an all-inclusive rental package which also covers their utility bills. They tend to pay close to full asking rental, also providing a 10 or 12 week security deposit. We usually find students to be very responsible and as a result, they usually make good tenants.
We have good stocks of rental properties in the City although with good availability prices are softening a little so we recommend landlords negotiate with tenants if possible. It goes without saying that in a competitive market, tenants expect showroom presentation. Demand is good in Canary Wharf although again most tenants expect to negotiate over asking rental. Glasshouse Gardens in Stratford is attracting a lot of interest both for the excellent value it offers (one beds are achieving upwards of £350 per week and two beds upwards of £400 per week) and because of its excellent transport links. The first phases of London Dock are now completing and generating a lot of interest. The development’s 22,000 sqft of sports and other facilities are opening over the next couple of weeks. We are looking forward to the opening of our new on-site office in late July and would be delighted to talk to landlords wishing to rent their properties at the development.

South East London (Surrey Quays and Greenwich)

The final phases of apartments at Surrey Quays are completing now – Endeavour House and Quentin Court (formerly known as Mariner’s Place). The development has a gym and a 24-hour concierge and excellent links to the City and Canary Wharf. We have good stocks available here and one bedroom apartments are achieving upwards of £340 per week. Slightly further out, our Greenwich office is busy handling enquiries for the developments of Royal Woolwich Arsenal and Kidbrooke Village which remain very popular – one bedroom apartments are achieving upwards of £260 per week. These appeal to applicants who are happy to undertake a slightly longer commute (25 to 40 minutes to the City) in exchange for a lower rent.

South West central London (Nine Elms and Imperial Wharf)

Rental demand is increasing noticeably at Nine Elms and we are now letting some properties before completion takes place, particularly one bedroom apartments and studios. Studios are letting for £380-£410 per week and one bedroom apartments for £440-£475 per week. We often have a waiting list of applicants ready to move in. There is an attractive park here and new restaurants and bars opening all the time, making the area a vibrant and exciting place to live. We are also seeing applicants moving here, particularly to Battersea Power Station, from areas like Chelsea, north of the river, as the development becomes a popular choice for young professionals. Demand remains steady at Imperial Wharf, with high numbers of tenants renewing their leases at the moment. The new phase at Chelsea Creek, Lockside House, is being well received and we have several new instructions here.

Central London (Hyde Park/Paddington, Knightsbridge and Kensington)

Our Knightsbridge office is taking on quite a few new instructions at the moment and there is a noticeable increase in activity in the rental market generally. We are seeing increasing numbers of applicants, with studios and one and two bedroom apartments being most sought-after. In Kensington we have good availability of properties, with the number of applicants fairly evenly balanced with the number of rental properties available which is leading to a steady market. One bedroom apartments up to £500 per week and two-bedroom apartments up to £700 per week are in highest demand. Although the rental market has been a little slower than usual around the Hyde Park area, enquiries are starting to pick up. There has been interest from senior executives looking for properties priced around £1300-£1400 per week as well as from junior professionals searching for smaller apartments in the £400-£500 per week price bracket. We are also handling enquiries from students and graduates moving to London for their first job. As ever, areas like Notting Hill, Portobello Square and Paddington Basin remain popular. However, most applicants are aware of current market conditions and expect to do a deal so landlords should be prepared to negotiate to minimise voids.

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

Despite a difficult rental market, the first six months of 2017 have been very positive for our Hampstead office and business was up significantly compared to the same period in 2016. One and two bedroom properties priced up to £600 per week are letting well and there is good demand – we have shortages of these smaller properties. However, applicants are aware of current market conditions and do expect to do a deal. Landlords should be aware that they must be prepared to negotiate to secure a tenant quickly and minimise voids. Demand for larger family homes priced at £1000+ per week is a little slower than usual for the time of year. We continue to see professionals from Europe, the US and Asia relocating to Hampstead from overseas but not quite as many as usual. We have good stock levels but applicants are taking their time and comparing a number of properties before they make a decision. Our Highgate office is seeing similarly good demand for smaller, one bedroom apartments although enquiries are slower than normal for larger properties than we would expect at this time of year.

At our Beaufort Park office in Colindale, business is brisk with enquiries continuing to pick up in the last few weeks. We are dealing with a lot of enquiries, particularly from students about to start at the University of Middlesex. Many of these are from China and while they tend to move to London in August, increasingly many now take an English course before their studies start officially so move here to find an apartment a couple of months earlier than usual. One and two bedroom apartments are in high demand particularly at Golding House and Goldhawk House.

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