The London rental market – July 2018

The sun is shining and there is an extremely positive feel to the rental market in London too. The season between May and October is known as the ‘Golden Period’ in the lettings industry – our busiest time of year when demand peaks. This summer is no exception and rental demand is high, with properties letting quickly. Tenants are actively looking for new homes and we are receiving steady numbers of enquiries from all types of renter – students, young professionals, graduates moving to London to take up their first job and families looking to move in to a new property before the start of the September school term. Many of these are Londoners but we are still seeing many professionals relocating from overseas or from other parts of the UK. So all sizes and types of property are letting quickly, as long as they are accurately priced reflecting local market conditions which can differ across the Capital.

An interesting trend we’re seeing increasingly is that tenants are now signing much longer tenancies – often two or even three years – keen not just to avoid the hassle and expense of moving but also to be certain of their accommodation budget for the foreseeable future.

There are a lot of new property developments launching now with more to follow in Quarter 3, particularly in East London, so stock levels are good generally across most of our London lettings branches and we have good availability to meet demand. We have waiting lists of applicants in some areas where demand is outstripping supply and some are very specific as to which development they wish to live in. Hammersmith’s Fulham Reach scheme is a good example as we don’t have enough smaller units to fulfil demand here. Some applicants are asking to pay a deposit or sign a tenancy while they remain on a waiting list.

If you are a landlord reading this, then all I can say is do your research before buying a rental property. Ensure it is in a good location and ticks as many of tenants’ boxes as possible. For example, Crossrail is starting to have a real impact on where tenants are looking to rent a home (you can read more about this in our City section) while renters are increasingly recognising the monetary value of a property development’s facilities. A residents’ gym could save them £100 a month compared to a separate gym membership. At Beaufort Park in Colindale, if you rent in a brand new building, you get 1 year free WiFi and these kinds of incentive are great for students.

Furnished to let – transforming your rental property

We always emphasise to landlords that if they own a rental property that is coming onstream at the same time as many others in a new development, they must ensure their apartment stands out from the crowd. So make sure the interior appeals to tenants’ aspirations for a sophisticated, comfortable lifestyle which is key to letting a brand new property quickly. If you’d like to find out more on how to achieve this, talk to our any of our lettings branch staff who can advise you how to get the most out of your investment.

Central London

Rental enquiries are increasing daily at our central London lettings branches in Kensington, Knightsbridge and Hyde Park as we move into our busiest time of year. High levels of enquiries are coming from families, as we would expect this time of the year, looking for homes ahead of the September school term, typically three or four bed period homes. Budgets are around £1000+ per week. They have high expectations, demanding a high spec and modern interior like this managed property in Berners Street W1. We are also seeing good demand from students with quite a lot of professional sharers needing two or three bed apartments, with joint budgets of £800 – £1,000 per week.

A number of applicants are also looking to upgrade – either to a higher specification property or one with more space. New-build homes remain especially sought after and applicants are requesting a parking space and some outside space – either a balcony or small garden. Stock levels are now running low so to meet high demand we are looking for new instructions on all types of properties.

More tenants are looking for stability, keen to save themselves the stress involved in searching for a new home and moving unless they really have to. As renting is a way of life now, many want to rent for longer periods, on average, around two years.

1 bed to rent at Battersea Power Station

At our Nine Elms branch, rental demand is rising rapidly and the next two developments to launch – The Residence and Embassy Gardens – are attracting high levels of interest. We’re receiving instructions for both and expect one bed apartments at The Residence to achieve £450-£475 per week and two beds £600-£675 per week while at Embassy Gardens one beds should achieve £525-£570 per week and two beds £625 – £800 per week. Demand at Battersea Power Station is insatiable and rents are increasing now due to shortages of stock, particularly one bed apartments. We have a tenancy renewal rate here of nearly 100%. Only one tenant has moved out after their first year’s tenancy and this was only because they were moving back to China!

The City and East London

During the first six months of 2018 our City and East London branches have performed extremely well thanks to high rental demand matched by good supplies of sensibly priced properties. The trend for applicants to move East looking for better value rental accommodation continues while the imminent launch of Crossrail is starting to have an impact on tenants and their long-term decisions on where to live.

Increasingly applicants are focusing their interest around soon-to-open Crossrail stations which, when the line launches later this year, will dramatically reduce commuter times across the Capital. There is a small window of opportunity before rents rise significantly in these areas so some existing tenants are even ending their current tenancies early in order to secure a new rental home near a Crossrail station before this happens. As a result, demand in popular schemes such as Woolwich’s Royal Arsenal Riverside and Royal Wharf in Silvertown E16 is increasing at quite a pace and we expect this to ripple out to neighbouring areas too.

Properties in the City are letting fast and stock levels are diminishing. The next new development to launch in a few weeks is Landmark Place in EC3 near Tower Bridge. This premium residential building, with top flight amenities including a pool, gym, residents’ club and concierge, completes this summer. We have several properties available here and enquiries are starting to come in already.

1 bed to rent at Blackfriars Circus

And launching in a few months is Principal Tower in Shoreditch, EC2. It’s a 5* residential tower overlooking the City of London, with first class amenities and an uber-luxurious spec. We have received several instructions here already and expect the development to attract a lot of interest. The next phases of Goodman’s Fields in Aldgate, Blackfriars Circus and Two Fifty One Southwark Bridge Road all launch over the next few weeks so tenants looking for a rental property in the City have an unrivalled choice of exceptional new homes to choose from.

In Canary Wharf, our team is handling enquiries for Sailmaker’s in Millharbour, a few minutes’ walk from South Quay DLR station. This development is purpose built for rent or corporate lets and, as one of the preferred letting agents, we are looking forward to the launch in September and expect to have good levels of stock. Our Surrey Quays branch has had a fantastic response to new properties at London Square Canada Water and we are looking for new instructions here too. Demand is strong at the new phase of Surrey Quays, Marine Wharf East, where we would also like to have more stock. Our Wapping branch reports that demand at London Dock is really picking up pace, with apartments letting well – its extensive amenities are proving a real selling point. Properties in Shoreditch and Spitalfields generally are in high demand while One Tower Bridge is also receiving a lot of enquiries from renters. There is also rapidly increasing demand for properties in Greenwich where Enderby Wharf is generating a lot of interest while the imminent launch of the new Crossrail station at Royal Arsenal Riverside in Woolwich is having a positive effect on rental demand in the area, bringing in new waves of renters who might not have considered living here until recently.

North / North West London

2 bed to rent at Beaufort Park

Our Beaufort Park branch is incredibly busy and, in fact, just had their most successful June ever, with our lettings team concluding the highest number of tenancies during the month since it opened in 2006 by a margin of nearly 10%. Properties are letting almost immediately and there has been exceptionally high demand for the new building, Argent House, where almost every apartment has now been rented. There is particularly high demand from students at the moment. Many tenants, keen to put down roots, are now signing longer term contracts of two or even three years.
Our oldest branches in Highgate and Hampstead are doing brisk business. Properties of all sizes, from one bed to five bed homes are letting well and enquiry levels are particularly high from families looking to move before the start of the September school term. Budgets are good and most properties are achieving close to asking rental, with tenants recognising that demand is high and not wishing to lose a property they like for the sake of a few pounds a month. We are seeing strong demand from professionals relocating here from overseas. In particular we are receiving a lot of enquiries from French families keen to live close to the nearby College Francais. A couple of developments launching now are attracting a lot of interest too – Smithfield Square in Crouch End and the latest phase of Woodberry Down in Finsbury Park – both of these are in high demand.

West London

Riverside living at Imperial Wharf

Demand remains high for rental accommodation throughout West London and properties are letting quickly at our Imperial Wharf (and Chelsea Creek), Dickens Yard and Kew Bridge branches. With the rental market so busy over the last few months and waiting lists of tenants looking to find a home here, we are running short of stock in some developments and would like to talk to landlords about new instructions. Professionals are keen to relocate here from overseas, particularly Japanese tenants, and we continue to see applicants move here seeking high spec accommodation with good amenities at lower prices than in central London. We are seeing high levels of renewals too – around 90% – which is excellent news for landlords, allowing them to eliminate voids.
At Fulham Reach in Hammersmith, our on-site branch is also extremely busy and stock shortages remain an issue here too. We have currently let all our properties at Sovereign Court but are expecting more instructions in July. At Fulham Reach itself, properties are also letting quickly and we have tenants ready to move in as soon as a property becomes available.

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 over 35 years Anita has been the driving force behind Benham and Reeves Residential Lettings’ success as it has grown from a single Hampstead lettings branch to central London’s largest, independent lettings and property management company, with 16 branches across the Capital. 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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