Posts with tag: London

Rental demand has returned to London, says lettings portal Rentd

Published On: March 31, 2022 at 8:08 am

Author:

Categories: Lettings News

Tags: ,

73% of surveyed estate agents back mandatory licensing

The London rental market has seen a quarterly increase in rental demand during the first quarter of 2022, according to research from lettings portal Rentd.

The research looked at the hottest spots of the London rental market based on the proportion of total rental stock currently available on the market that has already been snapped up by tenants, as well as how this demand has changed over time.

Returning rental demand in London

The figures show that London rental demand was at 42%, climbing 4% on the previous quarter.

Waltham Forest has seen the largest increase in tenant demand, up +16% during the first three months of the year, with Redbridge (+12%), Barking and Dagenham (+11%), Havering (+11%) and Hounslow (+11%) also seeing some of the strongest uplifts.

Only eight boroughs have seen a decline in rental demand since the end of last year, with the majority found in the prime London market. Merton (-12%) has seen the largest quarterly decline, with Tower Hamlets (-4%), Islington (-3%), Southwark (-2%) Kensington and Chelsea (-2%), Kingston (-2%), Westminster (-1%) and Camden (-1%) also seeing a decline.

London rental market hotspots

Bexley, Waltham Forest and Bromley rank top for current rental demand, where 60% of all rental properties have already been taken off the market during the first quarter of this year.

Havering and Sutton have also proved popular amongst the capital’s returning tenants, with demand at 56% and 55% respectively.

Kensington and Chelsea and Westminster are currently the least in demand areas of the London rental market, with demand at just 15%.

Ahmed Gamal, founder and CEO of Rentd, comments: “The London rental market has been particularly hard hit during the pandemic and with a lack of both foreign and professional tenant demand, landlords have had to slash their rental price expectations simply to avoid long void periods with no income at all. 

“This has led to surges in demand over the last year as tenants have looked to take advantage of these much lower rental values but the London rental landscape has been unsettled, to say the least.

“However, this year has brought a rejuvenated level of certainty to the market, spurred by a return to the workplace and an uplift in rental demand for London properties. As a result, we’re seeing rental values return, and exceed, pre-pandemic levels in many parts of the market and this will be very welcome news for the capital’s landlords.”

Almost 85,000 new homes a year needed for London private rented sector

Published On: March 9, 2022 at 9:15 am

Author:

Categories: Landlord News,Property News

Tags: ,,

73% of surveyed estate agents back mandatory licensing

London needs almost 85,000 new private rented homes a year to meet its housing needs, a new report has found.

The report has been authored by economics consultancy Capital Economics and commissioned by the National Residential Landlords Association (NRLA). It reveals the stark shortage in the supply of rented homes across London. These conclusions are based on government targets which state that 340,000 homes a year must be built across the UK by the middle of this decade to meet future demand.

Capital Economics reports if owner-occupied and social rented homes in the UK continue at their ten-year average rate of growth, private rented sector supply would have to increase by 227,000 properties per year to meet government targets.

It says growth on this level is also needed if supply is to meet the needs of an anticipated 1.8 million new households over the next ten years. In the case of London, the capital would require approximately 83,000 new rental properties a year over the next decade.

The projections come as government figures show that the supply of private rented housing in London has fallen by 85,000 over the past five years.

Given that renting privately is often the first step young people take when they need to leave home or university, demand will only increase.  The 15-24 cohort in London is forecast to grow between now and 2030 by over 120,000 (almost 12%).

Additional survey data by the research consultancy BVA-BDRC suggests that in Central London 74% of private landlords saw an increase in the demand for rental homes in Q4 2021. This was up from the 54% figure revealed by BVA/BDRC’s Q3 2021 research.

Capital Economics says the Treasury needs to encourage investment in the sector to meet housing targets. It argues greater investment would support the provision of new housing, increasing the rate of new builds and switching commercial property to residential use. The report also points to the contribution the sector can make in moving stock from short term to long term lets and bringing empty homes back into use.

Ben Beadle, Chief Executive of the NRLA, comments: “As the demand for private rental properties picks up following the pandemic, renters across the capital will struggle to find the homes they need and want. For all the efforts to support homeownership, the private rented sector has a vital role to play in housing so many Londoners.

“Today’s analysis demonstrates the folly of the mayor’s calls for rent controls in the capital, a policy which would serve only to freeze investment in the very homes renters need.”

London property investment hotspots revealed for 2022

Published On: February 7, 2022 at 9:40 am

Author:

Categories: Landlord News,Property News

Tags: ,,,

New data from Portico reveals which London hotspots are primed for excellent investment opportunities due to a combination of affordability, rental yield performance, and regeneration in the area.

The London estate agent has commented on the following top hotspots:

Tottenham provides significant room for equity growth when compared to its broader borough market position, with regeneration projects in the works to back that growth.

Seven Sisters is an up-and-coming area offering affordable London living in close proximity to many popular, vibrant areas.

Edmonton is a vibrant multicultural community that offers fantastic rental yields, with excellent transport links and huge regeneration benefits.

Barking is back again from Portico’s ‘Where to buy property in 2021’ guide. It still represents outstanding affordability and opportunity for growth thanks to its connectivity and regeneration efforts.

Ilford is one to watch, with the eagerly anticipated impact of the Elizabeth Line completion coming soon. Ilford has affordable property prices, steady rental yields and is great for commuters.

Chadwell Heath provides affordable housing and Elizabeth Line connectivity is on its way. Proximity to many buzzing retail and leisure hubs and healthy rental yields are other benefits. Chadwell Heath is a fantastic option for investors looking for a more suburban neighbourhood.

Top six investment hotspots by average property price

Barking£357,796
Edmonton£375,889
Chadwell Heath£382,870
Ilford£475,541
Seven Sisters£479,020
Tottenham£515,474

Top six investment hotspots by rental yield figures

Chadwell Heath5.5%
Edmonton5.5%
Ilford5.3%
Barking5.3%
Tottenham4.5%
Seven Sisters4.4%

Tenant applications for London rental properties double in last six months

Published On: November 10, 2021 at 11:07 am

Author:

Categories: Lettings News

Tags: ,,

Tenant applications for London rentals double in last six months

The number of new lettings applicants in London climbed by 34% in the six months between October 2020 and March of this year, compared to the previous six months (April 2020 to September 2020), research shows.

However, this analysis from London estate agency Bective also reveals that the level of tenant applications for London rental properties has more than doubled in the last six months alone. It is up by 104% versus the previous six months (October 2020 to March 2021) and 173% when compared to the peak of the pandemic last year (April 2020 to September 2020).

Bective’s research shows that this tenant interest is also becoming apparent beyond the lettings application stage.

39% of London rental properties listed on the market have seen a let agreed in the last six months, according to the findings. This is up from 36% between October 2020 and March 2021 and 33% between April 2020 to September 2020. The number of rental properties as a proportion of all stock listed online (sales and rentals) has also started to drop, following a surplus on the market due to a drop in demand.

The research highlights that just 34% of all properties listed are now rental properties, down from 42% in the previous six months and 42% in the six months prior to that.

Thomas Dainty, Bective’s Head of Lettings and Property Management, comments: “It’s fair to say that the green shoots of rental market positivity that had started to spring at the back end of last year have now blossomed quite considerably and we’re now seeing the London rental market start to build a real head of steam.

“Not only are we seeing a strong uplift in the number of those enquiring, but these enquiries are also converting which is something we simply weren’t seeing during peak periods of pandemic uncertainty.

“This renewed intent is helping to clear the backlog of rental market stock that had otherwise sat dormant for much of last year. The result of which has been a boost to rental values and we anticipate rents to recover to pre-pandemic levels as a result of this continued demand and positive sentiment.

“We’ve already started to see rental values climb considerably for homes providing more space and the most suitable units have been subject to multiple bids, with the rent achieved up by some 10% on last year already.”

The six-month changes in new lettings applications and total levels of tenant demand and rental stock levels

Time periodChange in new lettings applications %Tenant demandRental stock
Apr 2020 to Sep 2020N/A33%42%
Oct 2020 to Mar 202134%36%42%
Apr 2021 to Sep 2021104%39%34%
SourceBective applications via Rightmove, Zoopla, On the Market and their own websiteRightmove (based on the number of rental properties Let Agreed, as a percentage of all rental properties listed)Rental properties as a percentage of all stock listed (sales and rentals)

Current London rental market values exceed pre-pandemic levels

Published On: November 3, 2021 at 10:09 am

Author:

Categories: Lettings News,Property News

Tags: ,,

Nine in ten outer London landlords report rising tenant demand 

Rental values across London have exceeded pre-pandemic levels in all but three areas, the latest property market analysis from Benham and Reeves shows.

The research shows that between 2019 and 2020, the average London rent price fell -3.4%. Some areas of London saw an even greater impact, with Camden rental values plummeting -20.7% in a year.

However, the London lettings and estate agent found that in 2021 tenant demand returned and current rental values now sit 9.4% higher than they did during 2020.

Rents prices are up 20.1% year on year in Kingston, with Bexley (18.3%), Newham (15%), Croydon (14.1%) and Hillingdon (13.6%) also amongst the largest increases. The City of London remains the only area yet to recover, with rental values still down -11.4% annually.

While a bounce-back from pandemic decline is encouraging, Benham and Reeves say the real positivity lies within the fact that the average London rent is now 5.7% higher than it was in 2019, prior to the market slowdown. Only the City of London (-22.5%), Camden (-18.9%) and Westminster (-4.6%) are yet to see rental market values return to pre-pandemic levels.

They also note that the volume of properties they are seeing let to tenants is up 67% year-on-year and 22.7% versus pre-pandemic levels, while landlords are now securing re-let rental prices some 10% to 20% higher than they were prior to the COVID-19 outbreak.

Marc von Grundherr, Director of Benham and Reeves, comments: “The London rental market has arguably been the worst hit as a result of the pandemic and we’re unlikely to see a period of such unexpected uncertainty again in our lifetime. Demand for rental homes evaporate almost overnight during the pandemic causing a surplus of stock on the market while rental prices plummeted.

“But the London market is nothing but resilient and when the tide starts to turn, it turns very quickly indeed. We’ve seen house prices in the capital enjoy the largest monthly bounce of all regions in a single month having trailed the rest of the nation for almost two years and the same revival is also apparent across the rental market.

“Demand is lifting and rental values have not only recovered, but they’ve also exceeded levels seen prior to the pandemic. Even better still, we’re seeing further positivity in the trenches and this current market activity is yet to materialise at a topline level where market statistics are concerned.

“As a result, we can say with confidence that the London rental market decline is now firmly behind us and so any lower confidence forecasts of further price reductions can now be disregarded with yet further positive growth forecast for 2022.”

Decline in London rental stock pushes rents up, estate agent Benham and Reeves reports

Published On: October 20, 2021 at 10:55 am

Author:

Categories: Landlord News,Tenant News

Tags: ,,,

The commuter belt rental markets where tenants can reduce their rent by as much as half

The cost of renting in London has climbed by hundreds of pounds a month, research from lettings and estate agent Benham and Reeves shows.

This is due to dwindling rental stock levels and could continue to do so if the issue is not resolved.

Benham and Reeves analysed both the change in available rental stock across the London market in the last year, as well as how this has impacted the cost of renting across the capital.

Across the whole of London, the number of available rental properties listed on the market decreased by 48% between Q3 2020 and Q3 2021. At the same time, the average cost of renting has increased by £109 per month.

Only the borough of Barking and Dagenham saw the level of available rental stock increase, up 1%. The average cost of renting in the borough has also increased by an average of 1%.

The rest of London, however, has seen the level of rental stock fall by between 10% to 30% year on year. The average cost of renting has climbed by 4%, which Benham and Reeves reports is an increase of £49 per month for the average tenant.

The average monthly rental cost has increased £95 per month in boroughs where rental stock has dropped between 30.1% and 50% compared to last year, resulting in a 6% increase in the average cost of renting.

In 10 London boroughs, the level of available rental stock currently on the market has more than halved in the last year. The cost of renting across these worst-hit boroughs has climbed by 9% on average, equating to a rental increase of £179 per month.

Marc von Grundherr, Director of Benham and Reeves, comments: “Restrictions imposed as a result of the pandemic saw demand for London rental properties evaporate almost overnight and many landlords were forced to dramatically reduce their rental income expectations simply to secure a tenant.

“However, we’ve seen waves of tenant demand return to the capital as social and workplace restrictions have been eased but while this demand is starting to snowball, the level of available rental stock remains notably lower than it was a year ago.

“As a result, the cost of renting has climbed quite considerably in many boroughs, with tenants now paying hundreds of pounds more a month as a result. Should stock levels remain muted, there’s no doubt that this upward trend will continue and the cost of renting in London will climb even further.”

The year on year decline in rental stock levels and the average change in the monthly cost of renting

No. BoroughsDecline in rental stock levels (Q3 2020 vs Q3 2021)Change in Average Monthly Rental Cost (%)Change in Average Monthly Rental Cost (£)
610% to 30%4%£49
1630.1% to 50%6%£95
1050.1% or more9%£179
London48%7%£109
Rental stock data sourced from Rightmove, rental price data sourced from PropertyData. Barking and Dagenham was not included in the above table as it was the only borough to see an increase in rental stock levels (11%) and a 1% increase in the cost of renting