Demand for rental properties in London continues to outstrip supply with rents increasing by 10% for one-bedroom properties since the beginning of the year.
According to real estate firm W A Ellis, there are now 30% more rental properties on the prime central London market than last year. In the sales market, overseas buyers are keeping sales demand high, it says in its latest market update.
‘As is typical for the summer months, the sales market cooled slightly in July as people head off on their holidays, but this does not mean the market is weakening. In fact, this month, all sales offers, which we have accepted, have been within 96% of the guide price, or at asking price or above. There has also been strong demand for quick exchanges and early completion dates ahead of the summer,’ said Lucy Morton, senior partner at W A Ellis.
‘This can largely be attributed to investment from overseas buyers who are taking advantage of the weak pound, and looking to cash in on ever increasing rental yields. In the last quarter, our average rental price increased by approximately 6%, and as we move into student season, rents are set to rise even further,’ she explained.
High net worth students are looking to arrange their accommodation ahead of the new academic year that starts in September. These students typically want to rent one bedroom flats which cost between £300 and £650 per week, however, due to the shortage of such properties, rents have increased by as much as 10% since the beginning of the year, an extra 4% increase on top of the 6% average increase the firm has seen across all rental properties.
July also saw strong demand for short term lets; people from all over the world come to London to make the most of the summer events such as The Henley Festival, Ascot and the races at Silverstone.
‘The demand for rental properties in prime central London continues to outstrip supply, but interestingly, the number of properties on the market has increased by circa 30% in the last year. Again, this can be attributed to buy to let investors who are keen to take advantage of the high and ever increasing rental yields in the area,’ added Morton.