London Rentals: A Landlord’s Market?
Without any shadow of a doubt, now is the ideal time for prime London properties to enter the rental market.
A bold statement? Not really, because there is currently low stock and high demand, which means rents are rising and void periods are decreasing.
It’s a perfect mix, and it makes financial sense too. Whether you’re an existing landlord, or a homeowner thinking about renting out your London property, now is the time to take action.
Put simply, people are looking to rent in London, and there’s a shortage of available properties. For the savvy landlord, this is an opportunity to be grasped.
Some of the biggest increases in rent have been seen in areas including South Kensington where rents grew by 12%*
Through anecdotal evidence and official statistics, it’s fair to say that the London rental scene took a massive hit during the COVID-19 pandemic, perhaps more than anywhere else in the country.
There are many reasons for this, including travel restrictions on international students and professionals and people wanting to move away during lockdowns – either temporarily to stay with family or permanently to get away from the city.
In some areas of London, figures show that rental demand dropped quite considerably; it was a fall of between 35 and 40 per cent in some neighbourhoods*. That’s a staggering amount.
But times have changed, and they have changed for the better for the most part.
The severe lockdowns that altered so much have been eased. Places in London have been opening their doors. The international travel restrictions have become less harsh. Offices re-opened.
From our Finchley Road branch, we already see that people are getting back to “normal” life. International students have returned to “in-person” classes rather than utilising remote learning. City workers are suited and booted as offices have opened in central London. Meetings are taking place. Coffee shops are busy once more.
Companies are once again bringing staff to London from overseas offices, especially Japanese companies whom we work closely with through our Japanese Desk.
As further evidence, and as widely reported, public transport has seen a considerable increase in usage. The latest Transport for London figures reveal that tube and bus passenger numbers rose markedly during September and October.
For example, on one single day in early September, it was the first time in 18 months that more than two million journeys were made on the tube.
Taps on the Tube were up. Taps on the buses were up. London has started to live once more. It’s plain to see that people have missed the office and are now beginning to enjoy the culture of city living again.
Despite the recent announcement of “Plan B” from the Government, we see that recent trends have cumulated to create a demand that will still continue into 2022.
But therein lies an issue – but also an opportunity. As we look back over October, and November, stock levels have dropped quite significantly.
Why is there such a high competition for rental properties?
The demand is there, but there are very few available properties, and there are several reasons for this. Low or reduced rents during 2020 mean that more people will renew their tenancies rather than move on.
In addition, over the past 18 months or so, some landlords took the opportunity to sell their properties to take advantage of the higher prices that were in part created by the stamp duty “holiday”.
Yet, people are queuing up to rent. There are stories of people outbidding other renters in their quest to secure their chosen dwelling. We have carried out, on many occasions, block viewings at properties with back to back appointments to multiple applicants.
We even have prospective tenants committing to properties without even seeing them in person, based off a Virtual Viewing through our interactive virtual tours.
What’s clear is that if you have a property available for the rental market, we are confident that you won’t have difficulties finding a tenant in London. We know what the market is currently like, and we have vast experience in helping landlords just like you.
If you’re a landlord, there’s an opportunity to take advantage of this right now.
There’s more financial opportunity to this too.
According to the latest figures from Rightmove, asking rent is on the up. The property website suggests that in Q2, the average asking rent in Greater London stood at £1,949, while in Q3, it was £2,019.
Similarly, in Inner London, the figure was £2,348, a substantial quarterly change of 5.6 per cent.
Again, opportunity and return on investment can be yours.
The London rental market boom means it is an ideal time for landlords or owners considering renting their properties to get them on the market while there is low stock and high demand.
It’s a perfect mix.
Get in touch on 020 7691 9000 or email us at info@excel-property.co.uk to discuss how we can help you take advantage of these opportunities.
Please also add us to your “safe sender list so that you will receive our monthly newsletters direct to your inbox. The next update will include a reaction to the introduction of “Plan B” measures on the rental market, once we see how they play out.
*Source: propertywire.com