British Summertime is here but within the prime central lettings market, times have not changed!
The lack of properties available continues to be severe. In February, the number of new instructions listed across all agents was 49% below their pre-pandemic average whilst the number of new tenancies was 60% lower.
The current constraints on activity are persisting and the situation is being worsened by the ongoing problems in the sales market. People are choosing to delay their purchases due to the instability in the housing and mortgage markets, further exacerbating the situation.
The good news for Landlords is that with stock in short supply, average rental prices continue to rise.
The latest data for February shows that they rose 8.4% over the last year and are now 19% above their pre-pandemic levels. In most markets across the UK, affordability pressures should put an upper limit on rents. However, given the international profile of the rental market in prime central London, we expect this upward trend to continue into the summer.
Over the past months we have seen many more tenants choosing to extend their tenancies due to the lack of alternatives, meaning those properties aren’t coming back onto the market, further restricting supply. At the same time, we’ve found a remarkable increase in corporate searches as businesses take the opportunity of favourable currency rates to invest in new London offices, raising demand in the larger homes.
Within the smaller properties sector, it is only a matter of time before international students start looking for accommodation for their upcoming semester in August/September. This influx of applicants in an already crowded market will create the perfect storm of a lack of supply meeting an unprecedented level of demand. Prices are likely to reach eyewatering levels as a number of applicants try to outbid each other.
Here at Plaza, we are on hand to ensure our clients achieve the best price possible whilst ensuring we put the right people in the right properties. We have unparalleled success in finding quality long-term tenants. Our team of experts is dedicated to providing exceptional service and support to both landlords and tenants, and we are always striving to stay ahead of the curve with the latest industry insights and trends. We are committed to helping our clients navigate the ever-changing climate with confidence and peace of mind. Please feel free to reach out with any property queries.