Greater Rental Demand For Properties In Fitzrovia
With demand for rental properties in central London continuing to rise, the cost of property to rent in Fitzrovia has increased to an all-time high.
Soaring demand and increasing rental values has alerted a number of astute property investors, with many actively looking to add to their buy-to-let portfolios. The latest market data from the Association of Residential Lettings Agents (ARLA) has revealed an upward trend in landlord investment over the past 12 months. The average number of buy-to-let properties owned by landlords peaked at eight in the final quarter of 2012, up from seven at the beginning of the year. The apparent rise in confidence in the market also prompted increased landlord activity, with 29 per cent stating they have bought a property in the past year compared to 25 per cent at the start of 2012. The increase in landlord confidence is also reflected in the rise in the value of buy-to-let mortgages, with an eight per cent rise in the final quarter of 2012 totalling ÂŁ4.2 billion according to Council of Mortgage Lenders. Ian Potter, Managing Director of ARLA, said: “The latest data from ARLA suggests that landlords are carefully but concertedly increasing their portfolios; activity is returning to the buy-to-let market. Whilst many investors naturally remain cautious, the climb to an average of eight properties per landlord shows that 2012 was a strong year for the PRS.â€? With more investors acquiring residential properties in prime central London, which includes Fitzrovia, housing stock levels in the heart of the capital have declined by around 25 per cent at the start of 2013 compared to the same period last year, according to property consultants Cluttons.
The company says that it is witnessing extraordinary levels of competition between domestic and international buyers for the limited property for sale, on the back of record high levels of demand for properties to rent in central London, including houses and flats to rent in Fitzrovia.
Charlie Noel-Buxton, partner for residential sales at Cluttons, said: “House hunters in prime central London, starved of options, are going to great lengths to secure a property when it comes onto the market, particularly those on the most desirable roads.” Research shows that there is not just a shortage of properties for sale in Fitzrovia, among other soughtafter areas in central London, but greater rental demand means that there are also now fewer homes to let, forcing more tenants to consider flatsharing in order to secure accommodation in the capital. In the past year, the number of bedrooms available for flatsharers to rent has fallen by over two fifths (44 per cent), according to a study conducted by flatsharing website easyroommate.co.uk. Over the same period demand has remained steady and this has put greater strain on an already stretched supply of rooms. This supply and demand imbalance has caused rents to rise 3.6% (£415 to £430 per month) since January 2012. Yet the firm estimate that the cost of flatsharing in the UK will increase by a further 4.3 per cent by the end of 2013, on the back of falling numbers of rooms available to rent and consistent demand from rentersin the flatshare market. Jonathan Moore, Director at easyroommate.co.uk, said:“The last few years have been tough for renters and 2013 will be no different. Falling numbers of rooms available to rent is putting strain on supply and leading to higher and higher rents. Flatsharing remains a much more cost-effective option for renters but anyone hoping to rent a room this year needs to be aware of the rising costs and factor this into their budgeting.” The general shortage of flats and houses to rent in Fitzrovia in relation to increasing demand is likely to push rental values in the area even higher over the next few months, creating fresh investment opportunities for landlords in the process.
“The success of the prime central London property market over the last five years is creating a wave of price rises,” said Andrew Ellinas of leading letting agents Sandfords. He added: “Property economists are also 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 cannot afford to buy and are increasingly deciding to rent long-term.” The booming London property investment market is expected to attract even more investors seeking solid rental returns and good prospects for capital growth.