Fierce Competition Sees Rents Soar In Central London Rents have continued to soar in the capital’s most desirable areas, fuelled by growing demand for properties to rent in central London, owed in part to a high level of fierce competition from frustrated would-be home buyers struggling to gain a foot on the housing ladder.
The typical rent in London rose by 6.2 per cent in February compared with a year earlier, according to the data from lettings network LSL Property Services - which owns chains such as Your Move and Reeds Rains. The hike in rental values is largely due to the lack of homes on the market in relation to demand. LSLdirector David Newnes said: “In the longer-term, the supply of rental homes will have to increase considerably to prevent monthly rent rises when the rental market re-enters its traditional peak season.� The property shortage in the rental market is owed mainly to a lack of house building, while many foreigners, who make up a significant share of those buyers taking advantage of attractive flats and houses for sale in central London, generally opt not to rent their homes out.
“Wealthy foreign buyers who own properties in these areas [central London] rarely rent them out. This has cut the pool of homes available to renters and contributed to sharp rental prices increases,” said Ludlow Thompson director Stephen Ludlow. New research by Ludlow Thompson shows that the average cost of primarily located flats and houses to rent in central London has now soared past the £5,000 per month mark.
New data published by Ludlow Thompson reveals that rents in SW1, which includes the elite enclaves of Belgravia and Knightsbridge, are the highest, averaging £6,171 a month. This is followed by W1, which covers Mayfair, Marylebone and Soho, where rents are £5,493, while rents in Chelsea, SW3, have reached £5,442. The success of the prime central London property market over the last five years is creating plenty of fresh buy-to-let investment opportunities, according to leading estate agents Sandfords.
The company is bullish on the private rented sector, pointing to the latest census figures that show the rising generation is moving to city centres to live. “They [people] cannot afford to buy and are increasingly deciding to rent long-term,” said Sandfords Director, Andrew Ellinas. He added: “The predicted capital growth in prime central London combined with the rental growth caused by the high demand and relatively low supply is a clear investment opportunity.” The success of the housing market in central London is likely to have a positive knock-on effect on the wider property market in the capital, particularly in those secondary areas on the edge of central London, such as St John’s Wood, Regent’s Park and Primrose Hill. Brendan Cox, Managing Director of Waterfords estate agents, commented: “There is no doubt that London has to be one of the top investment destinations for anyone looking for a safe-haven asset right now.” As rents soar and deposits to buy property become even further out of reach, the government needs to look seriously at how it can help more people buy property in central London, such as make housing more affordable. In the meantime, landlords will continue to reap the rewards of existing market conditions. Click here to get more info www.sandfords.com