US bank employees and European businessmen are boosting the prime property rental sector in central London, according to a new report.
They are among the rise in corporate tenants making a timely return to the market, offering a boost to landlords following George Osborne’s emergency Budget, according to property consultant Cluttons.
Several locations across prime Central London, including Kensington, Chelsea, Holland Park and Wapping, has seen an increase in tenants relocating for business, largely from America and Europe.
Traditionally, a high percentage of residential property in these parts of the capital was occupied by corporate tenants, but the recession impacted heavily on the number of business relocations. Now Cluttons is recording a 35% rise in corporate lets this summer.
Growth in the corporate market will come as a major boost to the industry as landlords take a view on the impact of the latest CGT changes.
‘Corporate lets represent a significant portion of the rental market in prime London and the decline in recent years has impacted on tenant demographics and rental returns for landlords,’ said Lynn Hilton, partner for residential lettings at Cluttons.
‘It is hugely encouraging to see a renewed demand, especially among those coming from overseas. This indicates a positive outlook going forward and reinforces London’s leading position in the world of business. The current rise in corporate tenants will help support micro markets and encourage growth across key parts of the capital,’ she added.
A separate report shows that poor inventories are costing UK property landlords some £12 million a year in lost claims as a lack of prepared evidence works against them in the event of a deposit dispute.
Since the introduction of the Tenancy Deposit Protection Scheme (TDPS) in 2007, the onus has been firmly with the landlord to prove their case. However as a result of improperly prepared inventories and lack of proper evidence, landlords now have less than a 1 in 10 chance of winning a dispute, it is claimed.
In 2009, there were 23,500 deposit disputes, a figure that is growing exponentially each year. Within the same period, 92%of these cases found in favour of the tenant, costing landlords an estimated £12 million in lost claims, according to the Video Inventory Agency.
While the TDPS is vital to protect tenants, the residential property market has been ‘consistently undermined’ by incomplete or sub-standard inventories, says founder Frazer Fearnhead.
‘When it comes to inventories, landlords have traditionally got away with the bare minimum. In my time I have seen inventories that have been scribbled on the back of an envelope. However, since 2007, the balance of power has swung in favour of the tenant. This is positive since many would-be cowboys have been pushed out of the market. However, it also means that law abiding landlords are losing money unnecessarily,’ he explained.
He launched TVIA after an incomplete photographic inventory on one of his own properties meant there was no evidence to corroborate a deposit dispute so using similar practices to police standard operating procedures for filming crime scenes, each written inventory produced by TVIA is supported by high definition video evidence that has been designed to stand up in court.
‘Video inventories are watertight and cost effective. A visual record speaks volumes and it is clear from our work that video inventories are the future for the industry. To minimise disputes, adjudicators need to have as much information as possible to help prove a case. With video content, there is no room for debate,’ added Fearnhead.