Central London is experiencing a strong rental market so far in 2013 with some parts of the capital city seeing residential lettings increase by 110% in the first three months of the year. Other parts of the city at the upper end of the market are also experiencing strong growth, particularly Knightsbridge, Mayfair, Belgravia, Kensington and Marylebone.
The latest analysis report from West End estate agency, LDG, reports a strong rental market in the first quarter of 2013 with the number of residential lets increasing by 110% compared to the last quarter of 2012. Lettings manager Javier Carrillo said that it is encouraging for landlords following a stagnant winter rental market. However, he added that properties need to be realistically priced and presented in excellent condition to attract tenants in the current climate.
‘It’s encouraging to see an increase in the number of lets, however, rents are currently 3.63% below last year and in some cases, 6% below the highs of 2008, with tenants paying an average of £502 per week,’ he explained. ‘This can only be attributed to the fact that supply is now outweighing demand, and unless landlords ensure their properties are presented in immaculate condition, as well as being realistically priced, they will not attract tenants,’ he added.
The firm is currently seeing a relatively equal split of nationalities across the West End of London market with 26% of tenants originating from the UK, 36% from the European Union and 39% from elsewhere. ‘Previously, we have always seen a greater majority coming from abroad but the numbers have slightly diminished due to fewer foreign students this year and because some banks are recruiting fewer foreign expats. UK nationals are often forced out of Central London due to price, but with less competition and lower rents, they can afford to move back in,’ Carrillo pointed out.
The report also shows that 91% of tenants are single or couples compared to just 9% who are sharers. Additionally, 82% of tenants are young professionals, 6% are students and 12% are corporate relocations. Consequently, the one and two bedroom flat market is the strongest sector.
In the prime lettings market in central London overall rents have crept up in some locations breaching an average of £1 per square foot a week, according to the latest data from property firm London Central Portfolio. On average, Knightsbridge is now achieving the highest weekly rents per square foot at £1.27 after a notable increase of 9.5% last year. Mayfair witnessed growth of 4% whilst Belgravia and Kensington held steady during 2012. These sought after postcodes are all fetching rents above the £1 per square foot mark per week.
Quote from PropertyCommunity.com : “The London rental market has had a mixed outcome in 2012 but has largely been steady throughout the year, according to an end of year report from lettings section of agents Aylesford International.”
Marylebone has also remained popular amongst London’s tenants and saw the largest rental increase of 10% over the same period. The firm said that its buzzy atmosphere and convenient links to Canary Wharf and Heathrow make it in demand and the area is now catching up with the top locations achieving average weekly rents of 96 pence per square foot. Small upturns were also seen in Paddington and Bayswater, South Kensington and Chelsea. These core areas saw rental increases of between 2% and 4%.
The areas more favoured by the British rather than international tenant, such as Pimlico and Notting Hill, have been hardest hit by the economic downturn, both witnessing rental declines. Covent Garden was the worst affected area last year with rents down 15% to 73 pence per square foot a week.