Chesterton Humberts: Balance of power shifts to tenants as stock levels increase
- Rents have come down slightly (by 1.7%) in last quarter of 2012
- Chiswick saw the strongest rental growth (7.2%) followed by Hyde Park (4.3%) and Islington (3.6%)
- Lettings valuations carried out by Chesterton Humberts in 2012 rose by 15.1% compared to 2011, while instructions were 10.9% higher
- Yields in prime London compressed in 2012 to 4.1% and to 3.3% for prime central London
- Rents are expected to remain subdued in first half of this year with modest growth of 2%-4% forecast in the second half of 2013
Nick Barnes, Chesterton Humberts’ head of Research: “Many landlords are now being more flexible when it comes to rent reviews with existing tenants, on the basis that it is better to retain a good tenant who pays their rent and looks after the property than deal with the hassle and expense of filling a void with a new and unknown tenant. Many tenants are now operating on reduced budgets and are looking for better value, even if it means moving away from their preferred central locations. Nonetheless, investors have still benefited from healthy capital growth and, provided they are realistic about setting rental levels, there is still plenty of tenant demand.”
Chesterton Humberts website
Douglas & Gordon: Lettings Barometer March 2013
Lettings Director Virginia Skilbeck: “Overall in February, there were just over 25% fewer tenants registering with just over 35% more properties available to let, compared to this time last year. This indicates that tenants are opting to stay in their current rental property rather than move in the current market.
“However, much like the sales market, there is a disconnect between the lettings markets in Prime Central London and areas outside of PCL. For example, outside of PCL there are fewer available properties and high demand which is keeping rental prices stable. Whereas PCL is experiencing higher than normal stock levels with fewer tenants which is applying downward pressure on the rental prices.
“Historically, rents have steadily increased in non PCL areas, whereas over the last three quarters they have plateaued in these areas and decreased in PCL, resulting in a narrowing price gap, so that it is now almost the same price to rent a one or two bed flat in Battersea as in some parts of Notting Hill. Like sales, there is double the number of applicants to each available rental property in non PCL compared to PCL, proving that there is currently greater demand for both rental and sales properties there.”
Douglas & Gordon website
Kinleigh Folkard & Hayward: London lettings market swings in favour of tenants
- 51% increase in the number of homes available to tenants compared with the same time last year
- Tenant levels have risen by 32% year on year with the average property now costing £1,512.00 per month to rent in the Capital
- Rate of renewal has fallen by 9% year on year
- Tenancies now average between 14 and 17 months
Carol Pawsey, Group Lettings Director at Kinleigh Folkard & Hayward: “We’ve seen a remarkable change in the lettings market over the past twelve months. The market in 2012 was firmly in favour of the landlord and was largely led by a lack of stock and a greater pool of tenants so competition was fierce and prices rose accordingly. The start of 2013 has however seen a shift and the market appears to be perfectly balanced with the right number of properties available for a good selection of tenants. Although competition is less prevalent, good quality homes which are realistically priced are certainly in high demand and therefore don’t market for long.”
John D Wood
Nik Madan, Operations Director, Lettings: “Having worked in the lettings industry for over 15 years and experienced a myriad of market conditions, I cannot recall being as excited about the prospects for a single year as I am about 2013. Tenant demand remains strong, fuelled by ongoing difficulties in securing lending, Europeans escaping the recession and higher taxation and coming to the UK for job opportunities, Middle Easterners fleeing strife at home, and companies starting again to relocate staff to the UK. Furthermore, our statistics indicate that once tenants have secured a suitable property to rent they are staying for longer periods than ever before. Rents consequently have risen steadily over the last 12-14 months.
“Looking through the property portals, it is apparent that there is a good amount of rental stock available. Upon closer examination, however, it is clear that much of it is overpriced and lacking in quality, and therein lies the opportunity. I believe that now is the ideal time to invest in a buy-to-let property.”
John D Wood
Plaza Estates: Rental Market Comment February 2013
Fiona Guthrie, Residential Lettings Director: “The New Year started very encouragingly with good demand for all types of rental property from both corporate and private tenants. As January progressed, the demand became less consistent, the initial heavy volume of enquiries perhaps being due to the long Christmas break.
“Stock levels are also fluctuating with shortages in some sectors and over supply in others. Consequently rent levels are softer in some categories whereas we are achieving asking prices in others. Following the tax changes effective 1st April 2013 genuine investments landlords are exempt from the newly introduced Annual Residential Property tax. There are also advantages for corporate landlords regarding Capital Gains Tax (for properties worth over £2m). These changes may result in a slight increase in property coming onto the rental market.”
Wetherell: Mayfair Rents
So far this year Mayfair rents have averaged £1,191 per week for flats, houses £2,916 per week. In the past 12 months there has been 416 properties let in Mayfair. 2% of the properties let in the past 12 months have been houses.
Average rents for flats have increased 22% in Mayfair since 2007.
Savills: Rent Rises Slow
- Across prime London, rents increased 1.3 per cent over Q1 2013, the largest quarterly increase in two years.
- The biggest growth was recorded in the South West where rents rose by 2.0% over the past three months. The prime South West suburbs saw the strongest growth in the quarter as renters looking for value continued their migration from more central locations.
- By contrast, prime central London rents slipped by -0.3% on average.
- Rents in prime central London, the highest in the capital at £62 per sq ft, still lag -3.2% below peak.
- In the most expensive core central areas, including Knightsbridge, rents are -6.5% below 2007 levels.
- In prime central London flats continue to outperform houses.
Savills forecasts that rents in prime central London will marginally outperform the mainstream this year with a 3% rise compared with 2.5%. The gap will grow over the five years to 2017 with rents in prime central London rising by 24% while mainstream rents are expected to grow by 18.2%.