The London rental market – May 2017

Although rental demand across London remains high, the market is challenging at the moment against the backdrop of recent political developments such as Brexit and the signing of Article 50, as well as a snap election being called for June. Many tenants are keen to play safe and remain in their current property until the outlook becomes clearer and with many renewing their existing tenancies the market generally is slower than usual at this time of year. Having said that we have seen enquiries picking up noticeably after Easter and new developments in particular continue to hold huge appeal for tenants looking for a new rental home. The most exciting new phases to launch over the last few weeks have been the two new buildings at Nine Elms – Sky Gardens and Ambrose House, at London Dock in Wapping and the latest phases of Surrey Quays and we are pleased to report that demand is high here.

In a slower market than usual generally though so it is important for landlords to be realistic. With plenty of stock available in new developments, applicants have a lot of choice so it is vital for those with older properties to ensure they are in excellent condition in order to compete with brand new units.

Over the years, the rental market goes through ups and downs and it is an issue faced by letting agents across the Capital. But what sets us apart from many other agents is our 60+ years of experience. We are lettings specialists so we are dedicated to letting properties without the distraction of sales. We have experienced similar circumstances before and we know how to work through a difficult rental market and advise landlords on the best solutions. So while we are working hard to let our clients’ properties as quickly as possible, landlords should listen to their letting agent who knows the market conditions in their area and can advise on asking rents. Please do contact your local Manager if there are any issues you would like to discuss regarding your rental property.

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

The last few weeks have seen good rental demand in Hampstead, a popular residential area which remains highly sought-after, even in times of wider economic uncertainty. In fact, business has increased 50% during the first quarter of 2017 compared to 2016 and enquiry levels are picking up further as we move into summer. With few residential developments locally, generally supply is well matched to rental demand and stock levels are good. Two bedroom apartments are in very high demand at the moment and just fly out as soon as they come onto the market. The market for larger family homes (£1000+ per week) is also picking up and we are seeing executives from France and the US with good budgets looking for three and four bedroom houses. Tenancy renewal rates are very high at nearly 90%, as tenants opt to keep costs down and prefer the stability of remaining in their current rental property. Rental demand in Highgate has been picking up since Easter and we have been receiving a lot of new instructions – one, two and three bedroom properties. We continue to see a broad mix of applicants moving to Highgate – young professionals, couples and families – both from the UK and overseas. Most have good budgets but applicants do want to find good value and expect landlords to negotiate. Experienced landlords tend to be more prepared to be flexible as they recognise from experience that a tenanted property, even at a slightly lower rent, is better than risking an expensive void period.

At Beaufort Park, the rental market is a little quieter than at this time last year but enquiries are picking up now. Many applicants are executives working in the City, and at the moment we are seeing many from the tech sector. Demand is good for the latest building to launch, Golding House where one bedroom apartments are renting for £300 – £340 per week. The majority of apartments have been professionally furnished by us using furnishing packages creating comfortable contemporary interiors that helps let these apartments quicker than others in the building. Beaufort Park is also seeing the opening of several new amenities – a new Sainsbury’s, a gym, a music school and a beauty salon and these are proving to be important attractions for potential new tenants.

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

Our Hyde Park office saw business increase by 15% during the first quarter of the year compared to 2016. The market is competitive but enquiries are increasing and despite political and economic uncertainty, we continue to see executives moving to London from overseas, mainly from Europe or Asia, with many organisations now approaching us directly rather than through a relocation agent. Developments such as Portobello Square and Paddington Exchange remain popular with applicants. Apartments in the £500-£650 per week price bracket are in highest demand although applicants remain keen to do a deal, whatever their budget, so we are advising landlords to be flexible. An interesting trend at the upper end of the market is an increase in the number of high net worth individuals moving to London from Asia. Many of these are wealthy entrepreneurs wishing to rent high end, period properties priced at £2000+ per week, typically in exclusive areas such as Belgravia.

Our Knightsbridge office has been receiving a lot of new instructions recently, particularly one and two bedroom properties. Well presented properties marketed at the right price continue to let although in this changeable market, experienced landlords recognise the importance of negotiating with prospective tenants to minimise void periods. As ever, excellent presentation is also essential to ensure a property lets quickly. Tenancy renewal rates are high at 85%, an indication that most tenants wish to opt for the stability of staying in their current property rather than incur the costs of moving unnecessarily. In Kensington, we are seeing increasing demand from relocation agents looking for spacious, newly renovated period properties finished to a high spec. This type of luxury period property is more popular than apartments in modern blocks at the moment. With plenty of properties on the rental market and a good choice for applicants, landlords are having to consider offers though to ensure their property lets quickly.

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

There is good demand for mid-range rental properties across the City, Canary Wharf and East London, but pricing remains a key issue for tenants seeking to keep costs down. Tenancy renewal rates are high as applicants remain cautious until the outcome of Brexit negotiations becomes clearer. Keeping an existing tenant is usually a good option for landlords, even without raising the rent, as it eliminates void periods and reduces the costs incurred in redecoration and admin when finding a new tenant. There is good interest in apartments in the City, particularly towards the east in Bishopsgate, Shoreditch and Aldgate where there are a number of new developments launching over the next few months. Demand for one bedroom apartments is outstripping that for two beds. With the number of professional sharers on the increase, we are also seeing more professionals renting just a single room in an apartment in order to save money.

In Canary Wharf, Canary Gateway remains one of the most popular new developments, offering great value for money. The development is finished to a good spec and has its own concierge so ticks a lot of boxes for many applicants. We will be officially opening our new office at London Dock in Wapping on May 9th, holding a launch event at the development. We already have tenants lined up on our waiting list ahead of completion which is expected from early May onwards. With such a positive response already the outlook is good at this eagerly anticipated development.

South East London (Surrey Quays and Greenwich)

We’re still seeing strong demand in South East London, with apartments at Mariner’s Place and Endeavour House, the latest phases at Surrey Quays, which launch in May, attracting plenty of enquiries, particularly from tech professionals who wish to be close to Shoreditch and Old Street. Apartments here are keenly priced and we have waiting lists for one and two beds.   We are receiving a lot of referrals from tenants who already live here.  Demand has picked up in Greenwich but our stocks are low so we are keen to talk to landlords who own smaller rental properties here. This south east corner of London is becoming very popular now so applicants who are unable to secure a rental home in Greenwich often look to nearby Kidbrooke Village, Surrey Quays or Royal Arsenal Riverside where they can find homes of a similar spec.

South West central London (Nine Elms and Imperial Wharf)

The latest exciting news at Battersea Power Station in Nine Elms is the launch of Ambrose House and of nearby Sky Gardens. Both are being met with great excitement and we have waiting lists of applicants. Generally, the rental market in this area is good, with two bedroom apartments most sought-after by young professional couples with good budgets happy to pay £600-£650 per week for a property. The development’s riverside location and proximity to central London are huge draws. Interestingly, we are receiving a lot of enquiries from pet owners as the developer permits pets if the landlord is also willing. Further along the river at Imperial Wharf and Chelsea Creek demand is perhaps a little slower than usual at this time of year but we have seen enquiries pick up since Easter. There is also a general trend here towards tenants renewing their existing tenancies (around 65%), again with reducing costs remaining a priority for many tenants.

West London (Ealing, Kew/Brentford and Hammersmith)

The launch of Faulkner House at the Fulham Reach development in Hammersmith continues to attract a lot of interest and we have been receiving plenty of new instructions to meet the high demand. One bedroom apartments are letting for around £550 per week. With little stock left at the existing buildings Distillery Wharf and Brunswick House, both Goldhurst House and Faulkner House are vital in helping us meet the growing demand for homes here. We are very busy dealing with applicants looking for rental homes at Heritage Walk, the latest phase of Kew Bridge West, while demand also remains strong at Kew Bridge. Both are popular with Japanese corporate tenants, with typical rents from £340 per week for a one bedroom apartment and upwards of £500 per week for a two bed. Japanese professionals also appear to love the new developments of Ealing such as Dickens Yard. We continue to see high demand here and June will see the launch of the new Vista apartments for which we are already receiving enquiries. Period properties are also popular and we are continuing to receive new instructions of some very attractive period conversions in Ealing.

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 do get in touch with us. For more London rental market news and updates, subscribe to our newsletter.