The London rental market – September 2019

Rental demand in London is simply phenomenal at the moment. The combination of strong demand from students, young graduates moving to London to take up their first job and professional renters generally (from the UK and overseas), means that enquiry levels are at an all time high.
Add to this the acute shortage of rental properties and it is a challenge to fulfil demand from applicants. Enquiry levels are extremely high across our 16 branches but our City, Surrey Quays, Wapping, Nine Elms and Imperial Wharf branches are particularly busy. Just one example of this exceptional demand is the Atlas Building in EC1, which is completing and has already had an amazing response. We let our first four properties there within three days of furnishing and we still have a further eight applicants looking for a property there. So if you have a rental apartment in these areas, please get in touch with your nearest Benham & Reeves branch as we have fully referenced tenants ready to move in as soon as properties become available. We’ve talked a lot recently about strong demand from students looking for rental accommodation, and they certainly make up a significant proportion of enquiries, but another interesting trend is the increasing importance of professionals working in IT and financial technologies which are becoming a key sector of the London (and UK) economy.

In fact, the capital’s tech sector is booming – Google, Facebook, Amazon, Apple and Snapchat have all been setting up new headquarters in London over the last few years, attracting investment of around £2.5 billion, more than any other European city – four times more than Paris, its nearest rival. London is also home to many funded tech start-up firms, often based close to Old Street and the famous Silicon Roundabout – which has been a magnet for tech entrepreneurs for many years now. You can read more about the importance of tenants working in the tech sector in our City and East London section.

So London continues to adapt and thrive and remains a hub for professionals from across the world – not just the traditional sectors of banking and finance but also new industries which will dominate the economy over the coming years. And, of course, these companies’ staff are all looking for high quality rental accommodation. So if you have a buy-to-let apartment in any of the areas of London covered by our 16 lettings branches, please get in touch. We will almost certainly have a referenced tenant ready and waiting to move into your property.

The City and East London

As ever, rental demand in the City and East London is very strong. Our challenge at the moment is to match the ever increasing number of tenants to the limited stocks of suitable properties. We have large numbers of prospective tenants looking for rental homes at all price points. A strong trend that we have been seeing recently is the increasing demand from professionals in the technology sector, all with very good budgets, looking for homes in East London. This is a real shift away from the sectors that used to have the biggest accommodation budgets such as the oil industry. Today the tech sector is leading the field and professional renters are from a mix of established tech companies as well as funded start-ups. We have been renting many properties priced at £1000+ per week, with tenants often committing to a minimum of a one year tenancy, or often two or even three year tenancies. One tenant recently signed a three-year lease at £1700 per week with no break clause – this would have been unheard of a few years ago. This means the landlord will receive over £250,000 in rent over the next three years. We are also seeing continuing strong demand from students, particularly overseas students who are moving to the UK for the first time. Clearly most wish to be close to their university so locations within a 10 minute walk of good universities are real rental hotspots.

As we mentioned in the introduction, close to the City, a very popular development is the Atlas Building which is now completing. Apartments here are letting very quickly, often within a couple of days. It is within walking distance of Old Street so very convenient for tech professionals. Studios are letting for £475-£500 per week, one bed for £550-£650 per week and two beds for £750-£850 per week. Our Wapping/London Dock branch is currently receiving new instructions at Neroli House, the latest phase at Goodman Fields, again in a great location not far from Old Street. Manhattan apartments here are letting for £475-£525 per week, one beds for £575-£650 per week and two beds for £800-£900 per week. The next phase, Cassia House, is due to complete at the end of September. Emery Wharf at London Dock is launching soon and again we expect demand to be high. Our Surrey Quays branch is now handling enquiries for apartments at Elephant Park, one of the stunning new developments at Elephant and Castle. Studios are letting for £375-£425 per week, one beds for £450-£525 per week and two beds for £625-£700 per week. Our Canary Wharf branch is handling apartments at Blackwall Reach which is now completing offering great value for money. Studios are achieving £350-£360 per week and one beds £375-£400 per week. Rental demand in Greenwich remains high and Royal Arsenal Riverside is one of the most sought-after developments, again offering excellent value. One beds are letting for £350-£360 per week and two beds for £400-£425 a week.

Central London

It has been a very busy few weeks at our Hyde Park, Kensington and Knightsbridge lettings branches, with stock letting very quickly, from studios and one bed apartments up to premium five bedroom homes. We’ve been receiving a lot of new instructions as well as reletting apartments to existing tenants renewing their tenancies. Developments such as Paddington Gardens (and Paddington Basin generally), Islington Square, Fitzroy Place and Rathbone Square are particularly sought-after by corporate tenants and we have waiting lists for properties in these locations. Students and young professionals are busy looking for studios, one and two bed apartments too. Kings Cross is another popular location, particularly for students studying in nearby Central Saint Martins and University College London. In terms of professionals relocating to the UK, we are seeing high demand from applicants from the US, Canada and Asia but there is also good demand from professionals working for Spanish, German and Italian banks in London. Many of these are looking for mid-range rental properties but there is also demand from executives looking for high end homes such as the £2000 per week, three bed apartment we let recently at Fitzroy Place to a senior Canadian banking executive. Many properties are letting before they even get to our website, so if you are a landlord with a property to let in central London, please do get in touch as we have fully referenced tenants waiting to secure a good rental home.

Demand for rental properties at Nine Elms Point is exceptional at the moment, with one bed apartments usually letting after a single viewing and two bed apartments also letting incredibly quickly, almost always for full asking rental. In fact, we have a waiting list of tenants already lined up when new properties become available so we are in urgent need of new instructions from landlords for both these types of property. The latest building to launch at Nine Elms, Gladwin Tower, is seeing highest demand as applicants often prefer a brand new apartment – applicants are a mix of young professionals and international students. A couple of weeks ago we rented a two bed apartment at another development, Parliament House, after just a few hours – we carried out eight viewings and immediately received four offers on the property.

North London

Rental demand at Beaufort Park in Colindale remains extremely strong, with apartments usually letting after a single viewing. Studios and one bed apartments in particular are simply flying out as soon as they become available and stock levels are currently very low. Two bed apartments are also letting quickly, with professional sharers often renting a two bed property together to save on accommodation costs. As usual at this time of year, demand from students is very high. Hopefully the stock shortages will ease a little when the next building, the Cornelia Apartments, starts to complete later in September.

In Highgate and Hampstead, properties are letting very quickly, mainly to young professional couples and graduates moving to London to start their first job. We’ve also had more enquiries than usual from international (particularly Chinese) students. Many younger professionals are opting to share a three or four bed home to economise on their accommodation costs. Most are not in a position to negotiate on asking rent though as the local rental market is so competitive at the moment. With one, two and three bed properties all letting so quickly, our stocks are running quite low so we are keen to talk to landlords who own a rental property in the area.

West London

Properties are letting very quickly across West London. Apartments at Fulham Reach and Sovereign Court in Hammersmith are letting almost immediately, usually for full asking rental. Enquiry levels are very high, with applicants a mix of professionals and international students looking mainly for one or two bed properties. We do also have enquiries for three bed properties but have very limited stocks of these. Hamilton House (formerly called The Henley Apartments) at Fulham Reach, is starting to complete now and we have received several instructions already from landlords.

Demand is equally strong at Dickens Yard (Ealing), Kew Bridge (Brentford) and Imperial Wharf/Chelsea Creek. All three branches are continuing to experience shortages of stock and most properties are letting within a week or so, usually for full asking rental. Developments that are a little further out, including Harrow Square in Harrow and Queenshurst Square in Kingston, are also letting quickly and have proved to be incredibly popular with tenants looking for excellent value for money. Again, if you own a buy-to-let property in any of these developments, please get in touch with your local Benham & Reeves branch.

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.