The London rental market – April 2018

The word that sums up the London rental market right now is ‘unpredictable’. Most of our 16 London lettings branches had a good start to March but demand has slowed down unexpectedly so landlords need to be realistic and understand that letting a property may take longer than usual.

One key issue is that there is a lot of stock available at the moment and the next few months will see some major new developments completing across London too. This gives tenants a wide choice. There are still plenty of applicants keen to view properties, but they understand the market well and know that, with strong competition around, they are in a good position to negotiate. They may view 12-15 properties before deciding which property to rent and they won’t be rushed – so the important thing for landlords to remember is – be patient!

A good letting agent will be able to advise landlords on what level of rent they should expect. And if a development is still under construction this may mean accepting a lower rent to start with – but landlords shouldn’t panic, it won’t be for ever – just until the building is completed.

Even more important than ever now is presentation. When dozens of properties come onstream at the same time, they all look virtually the same – an empty shell. I always advise landlords to make sure their property really stands out from the competition. Make sure yours is the beautifully, furnished, stylish home that applicants will fall in love with and just have to have. When you have spent maybe £500k on a property purchase, furnishing it well is the next logical step and an essential part of that initial investment to ensure you maximise rental potential.

Many tenants now view renting as a long-term lifestyle decision and they won’t accept second best for their home and a professional furnishing company will know what appeals to tenants to give it that all important personality and appeal. And they should have a range of furnishing packages to suit all budgets – and property types – so this is a very easy and effective solution. The investment in furnishing a property should pay for itself quite quickly – you may not achieve a higher rent – but you will let your property more quickly.

For more advice on letting your rental property as quickly as possible, contact your local branch manager.

The City and East London

Rental demand across the City, East London and Surrey Quays is buoyant and we have good availability of well priced properties in most areas, from the City, Wapping and Canary Wharf to Surrey Quays and Greenwich.

The opening of Crossrail (the Elizabeth Line) later in 2018 is starting to affect the rental market and the new line will be a gamechanger, making parts of East London much more accessible. The recent announcement that Crossrail fares will be in line with the rest of the Tube network (it was thought that prices might be higher) will be an additional boost. As a result, we are now seeing more professional renters attracted to areas close to new Crossrail stations and we have branches located close to all these areas where demand is likely to soar.

Apartments at Royal Woolwich Arsenal (the Crossrail station is located on site at the development) are handled by our Greenwich and Canary Wharf branches. Rental properties at Hooper Road (Custom House Crossrail station), Aldgate Place, London Dock and Goodman Fields (Whitechapel), Cityscape (Liverpool Street), Barts Square (Farringdon) are handled by our City and Wapping branches. The Stratosphere property development in Stratford will also see increasing demand and we are looking for new instructions here.

At Canary Wharf we expect to see the new station draw professionals to live in the area for the first time and the faster links to Heathrow Airport will also be an attraction so interest in Royal Wharf will take off soon. Another popular development generating a lot of interest is London Square in Canada Water, SE16 where we are also looking for more instructions. Demand in all these areas is likely to increase further over the next few months, driving up asking rentals and many applicants are seeking good deals now before rents increase. Investors who have paid a premium for a property in these areas may now be able to see the benefits, so should consider including a break clause in their next tenancy agreement to allow for a rent increase when demand takes off in a few months.

West London

Professional tenants continue to make a bee-line for the many new, luxury residential developments in West London. Our Dickens Yard branch in Ealing is busy finding homes for corporate tenants and Japanese professionals in particular enjoy living in the area. The Japanese High School in Acton is a major draw for them and the proliferation of luxury apartments in Ealing offers them the type of luxury accommodation they prefer. These are some of the best homes in West London and applicants have good budgets to pay for exactly the type of accommodation they want. This is also the time, at the end of the current tax year, when many Japanese firms relocate their staff. Nearby Kew Bridge is also busy and is a popular location with corporate tenants who prefer a different lifestyle – quieter and close to the river. Both areas are also conveniently located not just for commuting to central London, but also out to the many corporate HQs along the M4 corridor. At our Fulham Reach branch, the launch of the latest phase at Sovereign Court – Lancaster House – is attracting good numbers of enquiries and homes are letting well, particularly in the £560 – £625 per week price bracket. Fulham Reach itself is always popular, in part due to its spectacular riverside location, with two bed apartments achieving £750 – £800 per week. Business is also brisk at nearby Imperial Wharf and Chelsea Creek, a favourite with City professionals.

North London

Rental demand has been picking up noticeably in Highgate and Hampstead over the last few weeks, particularly for one and two bed apartments. We are also seeing larger, three and four bed homes letting more quickly and a marked increase in viewings as we move towards our busiest time of year for families relocating. With several high-profile tech firms relocating to London recently there has been an upturn in enquiries from young professionals and couples. However the market remains price sensitive and landlords must be prepared to negotiate to secure a tenant quickly.

In terms of new developments close to these areas, Woodberry Park remains incredibly popular and the latest block to be released, Odell House, is generating a lot of interest. We have a number of properties available here and the first instruction we received, a one bed apartment at £350 per week, let within days after just one viewing – before it was even officially on the market.

Over at Beaufort Park in Colindale, the latest building at Beaufort Park – Sterling House – is now launching. It will be the flagship building at the development and the tallest – and we have applicants ready to view properties there so are anticipating good demand. Some are moving from other apartments at the development, keen to upgrade, while others are new to the area, moving here on the recommendation of friends or colleagues who already live here. One bed apartments are expected to achieve £320 – £340 per week and two beds £440 – £450 per week. We have good availability of stock here.

Central London

The rental market is picking up across central London although affordability remains a key issue and smaller properties are letting most quickly. In Kensington, Knightsbridge and Hyde Park, demand is good and we are seeing high levels of enquiries, particularly for studios and one bed apartments. However, with plenty of stock available there is strong competition and it is very much a tenant’s market. Applicants will consider both new-build apartments and period properties but older homes must be refurbished and finished to an extremely high spec in order to compete. Tenants’ budgets have decreased a little and the market remains price sensitive so while one bed apartments (£450 per week) and two bed apartments (£600 per week) are letting quickly, demand is slower for apartments priced at £700+ per week. Applicants know the market is competitive and as a result, expect landlords to be flexible. The landlords who are letting their properties quickly and so minimising expensive void periods are those prepared to negotiate and compromise on asking rents. Most tenants also now ask for a six month break clause to allow some flexibility.

At Nine Elms Point, south of the river, rental demand is steady and beginning to increase, with new apartments generally achieving asking rental. Keybridge is another exciting development in this area of major regeneration in Vauxhall and units in the first phase here are now coming on stream. Demand is good and apartments are letting quickly.

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.