The London rental market – February 2018

Our 16 London lettings branches are reporting a strong start to the year, and most are finding that business has been better than expected over the last few weeks. We are seeing good levels of enquiries coming in from applicants keen to move home over the next couple of months and these are professionals from many different sectors – creative industries such as advertising and marketing, tech and retail as well as traditional sectors such as finance and banking – all indicators of a healthy economy.

Many branches are receiving more enquiries from relocation agents than we would normally expect in January too, with professionals relocating to London from the US, Japan and Asia in particular, another indicator of economic confidence. The student property rental market also remains strong, with wealthy, international students continuing to choose London over other European cities for their university education.

In terms of stock levels, supply is varying significantly between different areas, impacting on rents which are generally quite flat. For example, in Canary Wharf, at the Royal Wharf development in E16, there are a lot of apartments coming to the market, putting some downward pressure on rental values, while in Hampstead and Highgate we currently have shortages of stock as there are few new developments in the area so rents are holding up quite well.

Accurate pricing in line with local market conditions remains key to a property letting quickly. If a flat in a new development is competing with dozens of other properties coming onto the market at the same time, the priority is to let the flat quickly and this may mean the landlord must negotiate a slightly lower rent initially in order to avoid a void. Immaculate and stylish furnishings are also essential to give the property its own character so that it stands out from identical apartments in the building.

So realism is the key in this buoyant but competitive market. To get an accurate assessment of how much your rental apartment should achieve in the current market, do contact your local Benham & Reeves Lettings branch.

West London (Ealing/Kew/Brentford and Hammersmith)

The latest phase of apartments at Sovereign Court in Hammersmith is now coming to market and generating a lot of interest amongst applicants who are making enquiries at our Hammersmith branch situated at the Fulham Reach development which remains popular with corporates. Two bed apartments are achieving upwards of £695 per week. At nearby Queens Wharf, demand is good for all types of property, from £400 per week studios to three bed apartments priced between £1000 per week and £1300 per week. Both our Dickens Yard Ealing and Kew Bridge branches are seeing high numbers of enquiries, with apartments letting very quickly. There is a lot of interest from relocation agents at the moment and demand is much higher than we would normally expect at this time of year. We are concluding more corporate tenancies too, particularly with Japanese professionals and this is partly due to our Japan Desk who specialise in helping expatriate Japanese tenants, and getting them settled into London life. There is a bit of a shortage of stock, with registered applicants on waiting lists, ready to move as soon as a property becomes available so we would be interested in talking to landlords about letting their properties in Kew, Chiswick or Brentford. Apartments in Ealing and Brentford’s environs are achieving asking rentals currently.

South West Central London (Nine Elms and Imperial Wharf)

The rental market at Imperial Wharf in Fulham is extremely buoyant, with demand high, particularly for two bedroom apartments which are popular with couples and professional sharers. Properties are achieving close to asking rental and letting quickly as long as they are accurately priced. In fact, we were recently instructed on five new properties at Chelsea Creek belonging to one landlord who had switched to us from another agent as the properties had been vacant for six months. We adjusted the asking rental in line with current market conditions and we let all five properties within two weeks. We urge landlords to consider reducing their rental when competition for good tenants with higher budgets is fierce. A slightly reduced rental can be less costly than a lengthier void in the long run. Demand continues to rise at Nine Elms Point, with apartments letting quickly, sometimes within just a week or so, usually for close to asking rental. Generally, we have good availability of stock at the moment and thanks the President Trump, the Nine Elms location is firmly on the global map!

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

Rental demand in Knightsbridge where most of our traditional buy-to-let stock resides, is picking up considerably and we are seeing increasing interest in all types of properties at all price points, from affordable studios (upwards of £325 per week) to high-end apartments (£1150+ per week). Although we are now seeing more applicants that are in-market but competition is high as there is less demand for conversions now so we continue to advise landlords to be flexible when discussing rent. In neighbouring Kensington, enquiry levels are also increasing, with professionals looking for one and two bed apartments dominating the market. We have good stocks of properties and continue to receive new instructions from landlords so tenants have plenty of choice. In areas like these, exceptional presentation remains the key to a property letting quickly and minimising expensive voids. With many new-build apartments to let nearby, tenants are particular, and if a property looks shabby or has a tired kitchen or bathroom applicants will simply look elsewhere. Many landlords recognise this now and are taking the initiative by using the time between tenancies to renovate their properties. This enables them to compete with these immaculate new-build apartments in order to maximise the rental potential of their property in what is still a challenging market. Our Hyde Park branch in Sussex Place is another one of those seeing more enquiries than usual from relocation agents, with professionals from overseas accounting for most of the better than expected demand. The branch is also receiving increasing numbers of enquiries through word-of-mouth recommendation and with our China desk situated here this a clear indicator that excellent customer service really does pay off!

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

Our City and East London branches have had a very positive start to the year, with strong levels of enquiries and generally good stocks to meet rental demand. In fact, our City and Wapping branches have had their most successful start to the year ever. Demand is strong for all types of property, from studios to one, two and three bed apartments, with apartments priced between £450 per week and £900 per week in highest demand. A noticeable trend is the increasing number of professionals sharing an apartment in order to save on accommodation costs. Well presented, two bedroom, two bathroom apartments priced between £700-£900 per week are most popular with professional sharers and demand for these is higher than usual.
Our City branch is seeing a lot of interest in apartments at the new Blackfriars Circus development in SE1 and demand is high for studios, one and two bed apartments in particular. The asking rental for a one bed apartment is upwards of £495 per week and we would welcome more stock here. Demand for properties at London Dock in Wapping is also strong and we are looking for new instructions, particularly studios, one and two bedroom apartments. Our Canary Wharf branch has had a good start to the year although, with a lot of new stock coming to the market now, such as the first phase of apartments at Royal Wharf, E16, prices are softening a little. For tenants though, this is an excellent opportunity to rent a high spec apartment at a keen price point, with one bedroom apartments renting for upwards of £300 a week and two beds £375+ per week.

South East London (Surrey Quays and Greenwich)

Our Surrey Quays branch situated on-site at Marine Wharf reports a brisk January but unfortunately there is a shortage of stock and we really don’t like having registered applicants for properties and not enough available properties to offer them, particularly one and two bedroom apartments which are achieving upwards of £360 per week and two bedroom apartments upwards of £450 per week. The situation is similar in Greenwich, where we are also seeing a shortage of stock and therefore struggling to meet high demand; the area being popular with individual professionals, couples and families. Both these branches are keen to talk to landlords in these locations if they have property coming to market now or soon.

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

Rental demand is very good at our Beaufort Park branch in Colindale and we are noticeably busier than at this time last year, even though 2017 also had a strong start. We have plenty of applicants looking for homes – studios, one, two and three bedroom apartments – and while we have good stocks, we are also looking for new instructions to meet growing demand particularly in Colindale Gardens – a new build development that is coming on stream now. Applicants have good budgets and apartments are achieving close to asking rental at Beaufort Park – typically £290 – £330 per week for a one bedroom apartment, with increasing numbers of tenants opting for longer, two or three year tenancies. Highest demand is from professionals although we continue to see students moving to the development midway through the year, looking for a higher spec and better value than their initial student accommodation provides. Enquiries from relocation agents searching for homes on behalf of overseas applicants are up significantly and we are also seeing good demand from professionals moving to London with major tech companies currently relocating to the Capital.

Our Hampstead branch has had a strong start to the year with properties letting quickly, from one and two bedroom apartments to four bed family homes. There seems to be increased footfall and greater number of applicants looking for homes, but there is generally a shortage of stock in Hampstead. Accurately priced properties are usually letting within a week to 10 days. Similarly in nearby Highgate, the market is busy and there are plenty of applicants looking for a new home, again both smaller one and two bed flats as well as larger family homes. Both branches are looking for new instructions to satisfy demand.

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.