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.

Don’t forget to cancel your NatWest standing order* at least 3 days before the payment due date or you could end up losing money!

There’s a good example in The Observer‘s “Your Problems” series, where someone lost £1,125 after NatWest refused to stop rent payment the day before. Bank said it was too late to retrieve money so he ended up paying the former landlord and the new one. Read more here to find out why.

Other banks have no problems stopping the standing orders on the same day that payment is due and will credit the money if necessary.

*A standing order is when you tell the bank to pay a fixed amount to someone straight from your account at regular intervals. The money is taken from your account automatically on a fixed date and will show up on your statement.

Daily Mail has a good story about a family who fell into rent arrears and got evicted. Click here to read it.

Should you get into a similar situation – take action fast. Start by telling someone that you are down and out. The earlier you take action, the sooner things fall back on track.

Talk to your landlord
He is counting the days from the rent due date. Don’t leave your landlord in the dark – he might be able to help you come to a solution or perhaps you can reach an agreement of some kind.

Check if you qualify for any benefits
Housing Benefit, Council Tax Benefit or tax credits. You don’t have to be out of work to claim benefits and you could qualify for more than one. Contact your local council to see if you qualify.

Talk to an expert
There are many organisations that give free advice. If you don’t know where to start, begin by talking to the Ctizens Advice Bureau.

Citizens Advice Bureau (CAB)
The CAB offers free, confidential advice face-to-face or by phone. Most CABs also offer home visits, and some give email advice. Find your local CAB

Did you know that every month, flatshare website SpareRoom gives away 1 month’s rent to one lucky winner? On top of that, to celebrate their 5th Birthday, they are giving away a whole year’s rent! 

You are eligable to enter the competitions if you are renting with your friends, living as a lodger or renting a room in shared property. 

All you have to do is enter your E-mail HERE.

PS! Read the terms and conditions. The rent amount is calculated using website’s Rental Index!

The new FindaProperty.com Rental Index for March 2009 is now available!

A quick summary of what the report says about the London lettings market: 

- The average asking rent in London fell by -1.1% in March 2009 to £1,650 pcm compared with £1,669 pcm in February 2009. Average asking rents are also down by -6.9% over the year.

- Boroughs that are traditionally popular with City workers continue to suffer significant falls in asking rents with the City of London, Tower Hamlets (incorporating Canary Wharf) and Kensington & Chelsea being particularly hard hit on a year-on-year basis.

- Largest monthly fall in rents was seen in Hammersmith & Fulham, where asking rents fell by -3.7% in March 2009 to £2,190 pcm.

- The only London borough to see rental growth on both a month-on-month and year-on-year basis was Haringey, which saw rental prices rise by 1.4% in March 2009 and by 1.9% on the same month last year.

 
London boroughs overview – click on the table to enlarge the image.
  

Rental yields:

- Prime central areas such as Kensington & Chelsea, Westminster and the City of London as well as affluent west London boroughs such as Wandsworth and Richmond-upon-Thames, are seeing prices holding better and as a result rental yields are typically below 4.5%. In the case of Kensington & Chelsea the rental yield is as low as 3.97%.

- The highest available rental yields are currently achievable in Newham (6.90%), Barking and Dagenham (6.06%) Greenwich (5.99%) Waltham Forest (5.69%) and Hackney (5.63%).

- Many of the areas that are offering the most attractive rental yields are also undergoing regeneration, making them particularly attractive to investors who can benefit from strong short-term income and the potential for long-term capital growth.

Download the latest FindaProperty.com Rental Index.

*St James Park, London

One of the reasons why people don’t want to rent through the letting agent is because they have heard horror stories about how much they charge for their services. It might be a bit less safe to give that holding deposit to a private person but hey – at least you know you don’t have to pay any mysterious sums to get the flat. 

Patrick Collinson shares his view in The Guardian about how letting agents have screwed everybody during the boom years charging ridiculous amounts for their service:

 It strikes me that the main project of the lettings business over the past 10 years of buy-to-let madness has been to:

a) charge extraordinary fees to first-time landlords; b) try charging the same fees to the tenant; c) charge it all again at the end of the six-month shorthold tenancy; and d) disappear as soon as the landlord or the tenant needs something done.

I love the makey-up world of letting agents and their preposterous fees. The huge finder’s fee to landlords and as much as £400 to tenants for “administration” – which amounts to a few pieces of photocopied contracts. A credit check fee (£150?). An inventory fee (£80?). An insurance fee. A checking out fee. A cleaning fee. They simply make up these charges as they go along, hoping that the mainly young clientele think they have no choice but to pay up. These vulnerable young people, often laden down with student debt, are hit with a load of tripe. They are spurious items which, if they have any basis in fact, should fall on the landlord, not the tenant.

The Association of Residential Letting Agents ARLA is currently eagerly waiting for the government to regulate the business as more and more agents turn to lettings but who knows how long that will take. In the meanwhile, we think there are things that could be done right now to help make the market become more transparent, and service providers more trustworthy. 

ARLA should ask their member agents to publish the fees on their websites.

You don’t go to the shop and call the cashier for the price for each item you get, do you? Most of the letting agent listings do not display a tag with the real price, and this does make renters cautious. Who knows how much they charge – I’d rather find a home advertised by the owner at Gumtree, even if there are more risks involved in dealing with the private person.

We think the tenants should be able to conveniently see all the costs that renting through letting agent involves in order to be able to plan ahead, and compare different service providers. Either show them in the listing or on a separate page that could be easily found.

Adding a little transparency would be really good for the market. It would be a steady step towards gaining back that trust the letting agents seem to have lost in public’s eyes.

Asking prices in prime London lettings market fell for the 11th successive month and were 13.72% lower than this time last year, reports property portal Primelocation.com.

• Annualised price changes continue to fall and are now at their lowest since January 2005, with weekly rents 13.72% lower than this time last year.

• Weekly rental values have dropped for the eleventh successive month since March and are now 2.15% lower than January 2009. Landlords must continue to offer reduced rates in order to entice prospective tenants.

• For the second successive month, all five prime London regions have seen a decline in weekly rentals. With stock levels increasing by 97% compared to this time last year, all the regions in London are hit hard, especially Central London (-2.42%). North West London (-2.35%) and Islington, City & Docklands (-2.30%).

Download Primelocation.com Prime Index March 2009 (*pdf)

The very first edition of the FindaProperty.com Rental Index is now available!

London Rental Market

Asking property rental prices in London have begun to fall, as a glut of new property swamps the market. Areas that have been particularly dependent on tenants working in the financial services sector such as the City of London, Tower Hamlets (incorporating Canary Wharf) and Kensington & Chelsea, have seen the biggest annual falls in asking rents. Some areas such as City of London have seen their average rental asking price come down by up to 11.7% (=£221). In contrast, London’s more affordable boroughs have seen their rental asking prices rise by up to 6.7% (=£74). London average monthly rental price now stands at £1,669.

London boroughs overview, click to enlarge the screenshot of the report.

Andrew Smith, Head of Research, comments:

“The London rental market has been heavily touched by the recent turmoil in the city. Areas that used to historically be populated by city workers either renting by themselves or occupying a corporate let have felt the pinch the most. In contrast, more affordable locations usually situated in London’s outer boroughs have benefited from rental growth. We attribute this to tenants willing to expand their area of property search to achieve more affordable rents and these areas to be less reliant on city workers.”

Best & Worst performers, click on it to enlarge screenshot of the report.

Download the full report HERE.

The latest research from The Deposit Protection Service (DPS) reveals that Westminster remains the most expensive area in the UK, measured by the average deposit demanded by landlords. The average deposit has fallen slightly in the past six months, from £1,909 to £1,890.

*Notting Hill

Estate agent Chard once again sheds some light on what is really happening with London rents.

Click here to see how many tenancies their Kensington and Notting Hill lettings department signed, and what were the asked/achieved prices for the period of  1-14th of February.

No one paid the asking price. The rents were negotiated down from £5 up to £500 per week.

Click here to see the numbers for September 2008.

Oxford Street 2008

Simon Rubinsohn from Royal Institution of Chartered Surveyors expects the rents to keep falling in 2009, Telgraph reports.

What will happen to rents over 2009?

Rents are likely to continue to slip, reflecting excess supply and the poor economic background. The pressure has been most intense in larger houses, where we have seen a lot of new supply coming on to rent. With the weak sales market that area will continue to see more supply, as people who do need to move are still unable to sell. It will be a less powerful story than in 2008, but that area is still one where rents are most vulnerable. Partly because of that issue, and also because of job losses and wage pressures, London is seeing greater regional pressure on rents. The trend will be generally down, but London remains the most vulnerable.

There’s a big Christmas sale over at Jacob Fox!

The banner says the rents have come down up to £100 per week but I just saw one apartment’s price cut by £125! Not bad!

Click here to see the list of more than 400 rentals in the majority of East London and parts of South East London. Their offices are in Canary Wharf E14 and Wapping E1W.

More discounts from estate agents!

Hudsons offers rent free period from the time a tenant moves in up to and including 31.12.2008 for selected properties. Not too many days left but even if it’s just a day – you’ll feel good about a bit of saving during this expensive month (unless you’re making the gifts yourself this year=wise choice).

Hudsons has rentals in Fitzrovia, Bloomsbury, Soho, Covent Garden and Marylebone. Click here to jump to their website.

Enjoy the good times while they last because according to Knight Frank‘s latest forecast 2009 will not be as generous to the renters.

According to Knight Frank, the rents rose across London by 16,9% in 2007, this year the expected decrease is -2,3%. In 2009 the rents will start going up again, with the predicted growth of 3%.

The 2009 Knight Frank Residential Market Forecast