London Rental Market – May 2015

Enquiries for London rental properties are coming in thick and fast as we move towards our peak season. Demand is particularly strong from young, single professionals. There is also growing demand for rental accommodation in London from wealthy, international students moving to university in London in September. Overseas tenants in particular are used to lateral apartment living so they tend to look for a similar style of property to rent in London. As a result, new developments continue to be at the top of many tenants’ wish lists.

Central London

Rental demand for properties in Kensington is dominated by young, single professionals at the moment, usually looking for one and two bedroom properties priced under £500 per week. We’re also seeing a lot of enquiries from wealthy international students looking for a rental property in Kensington before the start of the university term in September.

Demand is highest for properties in new developments with good amenities – a gym, swimming pool and concierge are often specified as fairly basic requirements. These sleek, contemporary apartments usually rent for a premium over traditional period conversions. A one bedroom apartment in a development might let for £650 per week while a similar one bedroom period conversion or mansion flat could fetch around £50 per week less.

Increasingly, tenants expect showhome standards when they view a rental property, particularly in this exclusive area of central London, so landlords should be aware of their high expectations. A high spec interior with good quality furnishings, luxury bathrooms and a state-of-the-art kitchen should be standard if a landlord hopes to let their property quickly and for the maximum rental. 375 Kensington High Street is one of the most popular developments and demand is always high for these apartments.

City, Canary Wharf, Docklands and East London

We’re seeing unprecedented demand for one bedroom rental apartments in the City, Canary Wharf and Docklands and have waiting lists for some developments. There is a real buzz to the rental market at the moment. Demand is particularly strong from the banking sector and from tech companies such as Google and Facebook. The relocation market is very busy too.

A clear trend we’re seeing is from professionals choosing to share an apartment so they can rent a high end property at a reasonable cost. They can find a spacious two bed apartment for around £650 per week, whereas to rent a one bed on their own would cost around £500 per week – so the cost savings can be substantial.

The level of tenancy renewals is high at around 70%, up around 10% – 15% on this time last year. Tenants are tending to leave only if they have purchased a property of their own or are moving elsewhere with their job. This is good news for landlords, ensuring continuity of income and fewer void periods which can really eat into profits.

Retaining a good tenant and renewing their tenancy also means landlords incur fewer costs than by setting up a new tenancy so this is usually a good option. These cost savings can really add up over the course of a few years. A successful buy-to-let business is not simply about increasing rents each year. In fact, it usually pays to keep a good tenant by just increasing rent by RPI or maybe without increasing the rent at all, if they pay on time and look after the property. Long term tenants usually take more care of a property as they view it as more of a home.

North/North West London

There’s been a real upturn in demand for rental properties in Highgate since Easter but with homes letting quickly we are now beginning to see shortages of housing stock so we are actively looking for new instructions, particularly larger properties. Many tenants are renewing their tenancies and renewal rates are high at around 70%. This is particularly noticeable amongst families who prefer to stay long term once they have found a home they like.

We’re moving into our busiest period of the year for larger properties when we see many families looking for a home in Highgate to be close to good schools such as Channing School, Fortismere School and Coleridge Primary School, ready for the start of the school term in September. We’re also busy with enquiries from French families about homes close to the Lycee Francais.

Enquiries are also strong for one and two bed apartments, with young professionals particularly keen to find a home in a new development – these are becoming more popular than the period conversions that Highgate is traditionally known for. Demand for these new apartments is huge and tenants are happy to pay a premium for a high spec and good amenities. Generally budgets are good although the market remains price sensitive and applicants expect to find value for money.

Contact us for more information about the London Rental Market.