Demand for Property to rent in London Continues to Soar
Now is a generally good time to be a landlord in London. Tenant demand is rising at a rapid pace while the supply of residential properties coming into the market remains historically low, pushing rents higher in the process.
The housing shortage is owed in part to the lack of new build homes coming onto the market. Residential property construction levels are at their lowest level since the 1920s, and this trend is expected to continue for the foreseeable future.
Furthermore, tight mortgage lending conditions are denying many people the opportunity to buy property, forcing them into rental accommodation instead.
Unsurprisingly, landlords are vying against one another to take advantage of favourable market conditions and add to their property portfolios.
A study by independent researchers BDRC Continental revealed that during the first three months of this year, landlords increased their portfolio size by an average of 1.8 properties. Yet of those landlords that took part in the survey, 20 percent said that they would seek to buy another investment home within the next 12 months.
David Salusbury of the National Landlords Association said: “Early signs of increasing property acquisition suggest that landlords are feeling more confident about future prospects of the buy-to-let market.”
Fierce competition for homes in London means that rent costs tenants an average of 40 per cent of their net income, with 16 per cent of renters in the capital paying more than 60% of their take home pay, according to Rightmove’s latest consumer confidence survey.
Demand for property to rent in London is generally greatest in primary areas in boroughs like Westminster, Kensington and Chelsea as well as Hammersmith and Fulham.
Robert Bartlett, CEO of Central London estate agents Chesterton Humberts, comments: “The prime London residential market continues to outperform the UK property market.”
Leading estate agents Sandfords report that Marylebone is currently one of the most sought-after areas to live in the capital, reflected by the lack of property to rent in Marylebone in relation to demand.
“Prices are high and supply short in prime Marylebone”, said Sandfords’ Andrew Ellinas. “For those looking to secure their offspring in good educational establishments, Marylebone has well regarded business schools, increasing its popularity with people from the UK and overseas.”
Fierce competition for homes in the capital means that high rental demand is also rippling out to secondary areas.
“Agents report that the seemingly incessant demand is causing rental price pressure to spill over into other previously less sought-after areas,” said Rightmove director Miles Shipside.
With the private-rented sector playing an increasingly important role in the provision of housing, John Heron, director of Paragon Mortgages, says that he is not surprised that landlords are benefitting from attractive investment conditions in the market.
“There is still a long way to go to meet the increasingly high level of tenant demand,” he said. “More investment across the private rented sector is needed during the coming year to help to meet this demand.”
Author Details : John Alcorn talks to various Central London estate agents and finds that demand for property to rent in London is soaring, particularly as far as property to rent in Marylebone in concerned.
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