At least one of my friends has been handed a notice to vacate his rented home by the time of the Olympic Games. His landlord plans to rent the flat out for at least five times the price for the couple of weeks from 27 July to 12 August 2012.

I asked a prime London property manager if this is common and she said that they are trying to end all their fifty plus agreements by the time of the Olympics… The busy autumn season starts conveniently right after and by the looks of it, there will an unusually large number of tenants looking for a new place.

The price we pay to live in this town!

A London landlord who has had the same tenant in his property for over five years is wondering whether he should start raising the rent. What advice would you give him?

Click here to read the City A.M. Q&A column where this question was raised.

Well, we certainly do not expect the landlord to freeze the rent just because we’ve been a good tenant but we would definitely prefer an annual reasonable rise to a big surprise hike!

Estate agent Knight Frank is in talks about letting out a 10,000 sq ft 5-bedroom property in the new One Hyde Park building with the rental price likely to be a staggering £45,000 a week, reveals PrimeLocation.com. That means the tenant would be paying £195,000 per month, £2,340.000 per year and this probably does not include the bills.

There are altogether 80 flats in this new building overlooking Hyde Park but if you think the owners would have problems renting them all out then read this.

Meanwhile we will keep an eye on Knight Frank’s offers and hope they finish the talks before we reveal this month’s most expensive properties for rent in London.

Referencing companies have started to require that prospective tenants earn at least around 3x their monthly rent, reports estate agent Cluttons.

For example, if a tenant wishes to rent a house for £2,000 per month, they must earn at least £60,000 and provide six weeks’ rent as a deposit. If they earn less than this, they are required to pay the difference in cash up front. Bonuses are not taken into account, and six month employment contracts, which are currently very common in the city, are usually not accepted.

Queens Gardens in Bayswater W2

Knight Frank has released the Prime London Lettings Index for April 2011:

- Prime London rents rose 0.4% in April, representing their 20th consecutive monthly rise. The latest monthly rise contributes to an annual growth rate of 16.3%.

- Rents in central London are at a record high, up 25% since their low point in June 2009 and marginally exceeding the previous peak reached in March 2008 by 0.2%.

- Strong rental growth has outpaced capital value growth over the past year, and has pulled income yields higher, with prime central London gross yields hitting an average of 3.8% in April, up from 3.3% in June last year.

“With rents now marginally above their March 2008 peak level we still see scope for 5% to 10% rises in rents during 2011,” predicts Liam Bailey, Head of Knight Frank Residential Research.

Read the full report HERE.

According to latest research from the Association of Residential Letting Agents (ARLA) rising number of tenants are said to be having problems paying the rent. In the 4th quarter of 2010 40% of letting agents reported an increase in tenants struggling to meet rental payments in the preceding six months. The situation was least noticeable in central London, where just under a third (27.9%) of members reported an increase, compared with the rest of the UK (46.4%).

ARLA’s research also showed a rise in the number of tenants haggling with landlords over rents, from 44.5% to 47.1%.

[Source: myintroducer.com]

St George Wharf, London SW8

Lack of supply in rental properties had an effect on both rents and yields in June, according to the latest Buy-to-Let Index from LSL Property Services plc. London continued to lead the surge in June, with rents in London rising by 1.9% to £942.

“London rents have climbed for five consecutive months, and there is no sign of a slowdown,” said David Brown, Commercial Director of LSL Property Services. “There is an acute lack of affordable housing in London, and would-be buyers cannot afford the rising house prices – or get big enough mortgages. The increasing reliance on rental accommodation in the capital, combined with the constraints in its supply is pushing up rents faster than anywhere else in the UK.”

Source: MyIntroducer.com: Rents surge across UK in June as supply diminishes

During the last couple of years a lot of intriguing housing benefit cases have surfaced and this weekend another amazing story was brought to us by The Daily Mail:

10.07.2010 Somali asylum seeker family given £2m house

We find this story appalling. While we are for diminishing the gap between the rich and poor, there must be something seriously wrong with the system when at the same time there are so many people living on the actual street. The Combined Homeless and Information Network figures show that the number of homeless people in London is currently around 4,000.

Here’s a few more unbelievable stories from the past year:

15.02.2010 Single mother-of-six finds £2m mansion on the net… and then gets YOU to pay £7,000 a month rent
15.01.2010 Millionaires’ Row 2009: How hundreds of families get luxury homes on benefits far beyond the means of most working people
02.12.2009 Afghan family STILL in seven-bed £1.2m house taxpayer has been funding for a year
30.11.2009 Taxpayers pay £1,600-a-week for family of ex-asylum seekers to live in luxury five-storey home

What the Budget plans for housing benefit

* Limits of £250 for a one-bed property and £400 for four or more bedrooms.
* Local housing allowance rates set using the bottom 30 per cent of rents rather than the median from October 2011. It will be linked to the consumer price index, rather than the retail price index. There are 1 million LHA claimants in the UK
* Cutting housing benefit by 10 per cent for claimants on jobseekers allowance for more than a year.

Source: Inside Housing

Meanwhile Inside Housing has launched a campaign to persuade the government to drop plans for housing benefit reform that could force thousands of people out of their homes. What’s the Benefit? follows an outcry from tenants and landlords (social and private) about the plans announced in the recent emergency Budget to save £4 billion by 2015 through measures including cutting and capping the local housing allowance paid to just over 1 million private tenants in the UK.

Demand by tenant type.

A lack of supply is pushing rents higher, says the latest RICS Lettings Survey.

Download RICS Residential Lettings Survey Q1 2010

London market comments from the local property professionals:

James Gubbins MRICS
Dauntons in Pimlico, Westminster
- The market has been somewhat static up until recently: now improving in line with seasonal expectations.

Ben Temple MRICS
Temples (Clapham) Limited in Clapham, Wandsworth
- More landlords are now selling their properties. The picture is very mixed with some good rental levels being achieved but in some cases rents have continued to fall. Tenants are still negotiating and there seems to be enough choice for them to go elsewhere if they believe a rental is too high. We expect this to change but economic uncertainty may constrain rental growth.

Craig Newell BSc MRICS MCIArb
Craig Sheehan in West Kensington
- Acute shortage of rental property. Many landlords selling. Will have an effect on prices (upwards) in the near future.

Edward Reeve BSc
Edward Reeve in Pimlico
- Market very steady.

Nik Madan
John D Wood & Co. (R&A) Ltd in Kensington
- There is a clear shortage of stock on the lettings market in London and the South East. As a result, rents (and therefore yields) are rising. It is likely that this potential increase in returns will serve to attract investors back to the lettings market, particularly with a weak sterling making investment in the UK very attractive indeed to overseas investors.

Nicola Mukerrins
Cluttons in Bayswater
- Demand is certainly outstripping supply. We have many families looking with decent budgets but very little to show them. All local agents are experiencing the same shortage which in turn is resulting in agents overvaluing to get the instruction. Very frustrating!!

Jeremy Leaf FRICS
Jeremy Leaf & Co. in East Finchley
- Shortage of good quality 1 & 2 bedroom flats – especially if including outside space – as well as houses suitable for sharers both within 1/4 mile of station is pushing up rents. There are some signs too of aspiring first time buyers leaving the rental sector and trying to purchase though most are still being deterred by strict lending criteria and high deposits required by lenders.

Mark Wilson MRICS
Globe Apartments in London.
- Tenants continue to renew at a level we can never remember being so high. If owner occupiers are trapped so too is some of the private letting sector. Empty flats continue to let well and we are urgently in need of instructions.

*Kensington in April 2010

Letting agents are doing a good job spreading the word about the rent rise.

Lucy Morton of  W A Ellis in Knightsbridge, the letting agent with 27 years of experience, tells Telegraph:

“Landlords who last year locked into long-term tenancies are now trying to revoke them and renegotiate rents, which are rising 15 per cent or more annually in prime parts of London. Tenants are being advised to renew contracts when they end, even if they come with a rent hike, because they would have trouble finding a cheaper property if they decided to walk away.”

“I had a tenant paying £800 a week for an apartment who was disgruntled when it rose to £875. He terminated the tenancy, couldn’t find a cheaper alternative, then asked if his old flat was still available. It had gone for £1,000 a week.”

Here are a few reasons why letting agents don’t have enough stock this Spring:

- First timers can’t pay deposits;
- Overseas investors are expanding portfolios;
- A lot of the owners are trying to sell their property in April, May;
- More landlords are renting privately;
a. More of those who realise they can do it on their own.
b. Landlords who don’t want to pay taxes.
- More (competition from) DSS tenants?

Read also ARLA Review & Index for Residential Investment 2010 Q1

The rents in Prime Central London rose by an average 3.1% over the first quarter of 2010, says the latest residential market report from estate agent Cluttons.

5-plus bedroom houses were seeing the highest uplift in rents at 7%. 4 bedroom houses also performed above average with an uplift in rents of 5.8%. 2 bedroom flats and cottages had the smallest increase in rental values in the three months to March 2010 (1.9% and 1.7% respectively). Central West London recorded the highest increase in rental values this quarter at 5.6%, followed by Central North West which recorded an increase of 3.2%.

The report also predicts that the growth in prices will not lead to a sharp uplift over the course of the year as the election time in May will probably bring slowdown in the sales market. That means there is some potential uplift in rental stock during this period.

Download Clutton’s London View – Spring 2010.

The lettings market is starting to recover as increased sales activity and the return of corporate tenants soaks up the surplus rental stock, reports FT Weekend:

- Association of Residential Letting Agents (ARLA) sees fewer properties becoming available;
- FindaProperty.com said that the number of properties fell by more than 6% in September;
- Savills sees renewed interest from corporate tenants and relocation agents;
- Tim Hyatt of Knight Frank said: “We are achieving rents just shy of asking price – but this is still around 10% lower than a year ago.”

Read the full article here.

Walking down the streets of central London you can see a lot of “Shop To Let” signs. One would think it must be a good time to rent commercial retail premises. According to the latest “Main Streets Across The World” report by Cushman & Wakefield, the prices in the capital haven’t fallen that much though.

In the UK, high street retail rents continued to soften around the country, falling by 2.4% over the year to June. However, the key streets in Central London have remained resilient and, indeed, rents have continued to increase in some locations in the capital. Moreover, the occupational market now appears to be showing signs of stabilising and, following a raft of retailer bankruptcies and administrations in early 2009, the worst of the retailer shakeout may now be over.

76 New Bond Street, Francesco Biasia store.

New Bond Street W1
Most expensive street in UK, ranking 6th in the world.
Rent: 5,885 EUR sq.m/yr

Oxford Circus

Oxford Street
Annual Rental Growth 2.9%
Rent 4,101 EUR sq.m/yr

Covent Garden
Annual Rental Growth 4.3%
Rent 3,550 EUR sq.m/yr

Brompton Road
Annual Rental Growth 0.0%
Rent 3,098 EUR sq.m/yr

Download the full report.

Search for commercial property for rent:
Convenient list of available shops with really good maps Shop Property
Commercial property for rent Primelocation

Property portal FindaProperty.com has just published their new monthly index of residential letting prices.

Flood of Flats Hits the Capital’s Rental Market

- London continues to underperform the country as a whole, with steady declines in both asking rents and yields over the past 12 months.

- Rents have fallen by 6.0% or £102 since August 2008, while yields have declined from 5.09% to 4.49% over the same period.

- Declines in rents and yields are largely attributable to the oversupply of properties available to rent. Stock levels rose by 50% between August 2008 and August 2009, and the number of properties on the London rental market has increased for ten consecutive months (since October 2008) as homeowners have advertised properties for rent rather than attempting to sell them in a tough sales market.

- The London rental market differs from the rest of the country. It consists predominantly of flats, which account for 84% of rental property available on FindaProperty.com. By way of contrast, in the national rental market, houses outnumber flats by more than two to one. The Survey of English Housing indicates that 66% of renters in London live in flats, suggesting that there is an oversupply of flats on the market relative to houses. Indeed, the supply of flats on the rental market has risen by 18% over the past six months, while houses are up just 7.3%, based on

- Asking rents for flats have fallen by 7.4% or £111 pcm over the past year, from £1,509 to £1,398 pcm; while the decline of rents on houses was, in percentage terms, less than half that – £79 or 3.5%, with a fall from £2,270 to £2,191 between August 2008 and August 2009.

- The relative scarcity of houses to rent in the capital makes them more sought after, especially for families and other people who need or prefer a home with an independent entrance and a garden. Many people who in other circumstances would have purchased a house have been discouraged by lack of confidence or prevented by lack of finance, or may be waiting for prices to stabilise. In the meantime they rent.

- The excess supply of flats could also be exacerbated by the pick-up in activity in the sales market, with some existing renters taking the plunge as owner occupiers and vacating their flats.

- The borough-wide picture is mixed. The boroughs showing the largest declines are Greenwich, Haringey, Brent, Merton and Lewisham, all with a monthly decline of over 2%.

Download the full report here - FindaProperty.com Rental Index August 2009

Estate agent Winkworth has just released an interesting Summer 2009 Price Guide for London and UK property, revealing the minimum and maximum rents for the properties their offices have dealt with in Summer 2009 and 2008.

One cannot say that the prices have fallen throughout the city in this past year – in some areas the rents for some properties have actually gone up:

Harringay 1-bed flat:
Summer 2009 min£760 max £1,040
Summer 2008 min £750 max £1,000

Edgware Studio Flat:
Summer 2009 min£600 max £750
Summer 2008 min £500 max £675

St John’s Wood 2-bed flat:
Summer 2009 min £1,700 max £2,600
Summer 2008 min £1,200 max £2,600

Still, in most cases the minimum price has remained unchanged while the maximum has taken a more significant fall:

Kensington 2-bed flat:
Summer 2009 min£1,500 max £3,500
Summer 2008 min £1,500 max £10,000

Islington 2-bed flat:
Summer 2009 min £1,200 max £3,000
Summer 2008 min £1,200 max £3,500

Highgate 2-bed flat:
Summer 2009 min £1,085 max £1,300
Summer 2008 min £1,148 max £2,166

Click here to download the full guide.