Severely low stock levels combined with increasing numbers of prospective tenants coming to market has pushed up prices, forcing many desperate would-be tenants into a bidding war.
Good quality instructions are increasingly difficult to come by in London, with tenants having to clamour to secure the best properties. This trend is pushing prices sky-high, with many prospective tenants having to compromise on the type of rental property they secure. Gone are the days of second viewings – tenants have to move swiftly if they find a property they like.
Rosanna Caldwell, senior manager, Hamptons International - Kensington branch said, “We are witnessing offers considerably over the asking price, with tenants increasing original offers, in an attempt to seal the deal. With a massive shortage of one bedroom flats available for rent – those that do come to the market are being let within hours, securing phenomenal prices.”
Libby Watt, lettings manager, Hamptons International - Sloane Square notes, “An attractive one bedroom property (with modern interior and close to tube and amenities) is always in high demand, especially owing to the large amount of single corporate tenants who are increasingly being relocated to London from abroad.”
The demand for one bedroom properties has also been exacerbated by the fact that so many first-time buyers are unable to get onto the housing ladder, and are instead turning their attentions back to rental properties. In addition, many existing tenants are agreeing to an increase in rent to avoid having to search for new property.
“There has been an increase in rising rents everywhere and as a result many tenants are unable to be choosy. For example, a recent applicant initially seeking a property in South Kensington for £550 per week has ended up taking a property for £1000 per week - almost double their original budget! Tenants who don’t want to move on property requirements have to be extremely flexible on pricing to secure what they want,” states Lesley Cairns, Regional Lettings Director - London, Hamptons International.
Cairns continued: “As house prices continue to rise, so do rental prices, encouraging more and more people to renew their existing contracts. New applicants registered were up 22% in February from January and 25% on last year. Viewings were also up by 12% on the previous month in February, and this pattern is set to continue.”
According to the latest survey by the Association of Residential Lettings Agency (ARLA), the overall weighted average value of rented houses has risen by 10.7% from £385,000 to £426, 900. Within this overall change, the average price of a rented house in Prime Central London has risen by 12.4%.
Cairns noted: “Despite speculation that buy to let has had its day, our statistics from the last month suggest that there has never been a better time to let a property - especially a one bedroom flat within a prime London location.”
