Following the recent interest rate increase and spiraling cost of housing, areas such as Pimlico, Kensington, Richmond, Islington and Paddington have witnessed extremely high levels of business, when compared to this time last year. Many of these offices are reporting tenants who are prepared to commit to securing properties on a let of up to three years with no break clause, as a result of current market conditions.
Overall rental demand is up 40 per cent year-on-year across London; much of the demand is made up by families who are relocating and need to tie the move in with the start of the school year. Many of these tenants are requesting three to four bed houses at the £1,500-£2,000 per week mark where, owing to an upward shift in the rental prices, supply does not match demand.
This manifests itself in tenants making lots of offers on multiple properties to secure the best deal. In fact, Hamptons’ statistics show that offers made are up 42 per cent year-on-year, and tenancies that are finalised are being agreed at higher rentals than this time last year.
The average rental renewal is up by 4.78 per cent in London this month and this trend looks set to continue as tenants are forced to stay in rental properties for longer. The London market is showing no signs of abating, with overseas buyers and city bonuses a factor in the continually rising price of property.
London lettings director, Kate Whotton, comments: “Despite Summer traditionally being the busiest season, August has exceeded even our high expectations. There has been a significant rise in the number of new lettings instructions and appraisals compared to June 2007, with instructions climbing 30 per cent and appraisals up by 15 per cent. With such high demand from applicants willing to commit for long periods, it is a shrewd decision to get into the lettings market, or to freshen up your investment property in order to capitalize on this activity.”
