Strong demand for rental properties has been recorded across the London market in the third quarter (Q3) of the year, according to estate agency JLL.
The firm’s London offices are reporting a strong lettings market for Q3, with high demand from a range of tenants, including high net worth students, families and corporate sharers.
On the prime London market, Lucy Morton, the Head of Residential Agency at JLL, says: “August has been particularly strong in the prime London lettings market. According to Lonres data, transactions were 48% up in Q3 compared with Q2 2018. Lettings demand does tend to be seasonal – the summer months are always exceptionally busy, with students and families settling in for the new term. In particular, students underpinned the market this summer – we have seen year-on-year growth in high net worth students coming in, both UK and overseas. They tend to rent one or two-bedroom flats and have budgets of around £500-£1,000 per week.
“There is also a strong market for corporate lets, who are taking more commercial space – despite the Brexit uncertainty, companies want a London base for their employees, as they can easily fly in and around Europe from here. Businesses such as Goldman Sachs and Unilever have confirmed that their headquarters are staying in London – and with that comes an army of employees who want to rent. Again, these tenants usually require one or two-bedroom apartments, so we’ve seen particularly high demand in this market, and there is now a shortage of one and two-bed properties available to let. We recently brought to market a development of 48 apartments by The Crown Estate – The Sherwood – and over half were let within two weeks.”
High demand for student properties
In JLL’s Canary Wharf office, student demand is also high. Lauren Hatcliff, the Associate Director, reports: “We’ve just had our busiest month for lettings – September transactions were up by 23% on August, and 63% higher than in July, which is unprecedented, considering that our July 2018 lettings transactions were also up year-on-year. The frenetic September was largely driven by the student market – we saw a high number of high net worth students, who especially like renting in the new communities in Canary Wharf, due to the facilities, security and accessibility to the City. We’ve also seen strong interest from young professionals starting internships in the City.
“We also saw a high level of tenants renewing their agreements – our renewals in August and September 2018 are up by 20% compared to last year in Canary Wharf, as people are happy to continue renting whilst they wait to see the Brexit outcome.”
High rental applications in Greenwich
The firm’s Greenwich office is seeing higher rental applications than ever, as would-be buyers maintain the wait-and-see approach. Yasmin Forrester, the office’s Associate Director, comments: “We are seeing demand from a range of tenants, particularly young professionals. Build to rent schemes are becoming more popular with these tenants, who are attracted to the amenities and community lifestyle. For example, we’ve let 60 properties in the Horizon building in Lewisham, which includes co-working spaces and pet-friendly floors.“For families looking to rent, there is now more choice on the market, as some landlords would rather let to families than sharers, due to the new House in Multiple Occupation licensing rules. Some of these properties have recently been refurbished in order to attract professional families instead of sharers.”
While demand for rental properties is high across London, this is largely for well-presented homes. Morton explains: “It is important to note that it’s the pristine properties and those in modern developments with an array of facilities which are currently letting well. Overall, there is currently more choice for tenants, so they won’t opt for something that’s deemed tired and over-priced.”
This sounds like good advice for landlords who are struggling to let their properties – make sure the home has everything that a modern tenant would be looking for!