More people forced to seek property to rent in London
New research by Countrywide shows that the UK residential sales market remains relatively static as potential buyers continue to be hampered by mortgage affordability constraints, which in turn is fuelling greater demand for property to rent in London.
Countrywide says that the London property rental sector is buoyant. At a time when mortgage affordability remains a highly important issue despite many lenders easing lending levels in recent weeks. The number of new tenants’ registering for rental accommodation increased by 28 percent in May compared to May 2010. Consequently, there was a 15.5 percent rise in the volume of homeowners considering placing their property on the rental market in May compared to the preceding month. Low mortgage affordability levels inevitably mean that more people are looking for property to rent in London. The high mortgage deposit barrier means more people are becoming part of 'generation rent' whether they want to or not. As demand for housing continues to massively outstrip supply, the cost of renting a home is also increasing. With demand for privately rented property showing no sign of slowing down, London-based lettings agents Ludlow Thompson report that the summer season rental rush has already started – two months earlier than last year. The company also reports that demand from tenants has improved rapidly in recent weeks, despite the summer rush not traditionally starting until July. Stephen Ludlow, director at Ludlow Thompson, says: “We have seen a real leap in the numbers of prospective tenants so far this summer. Many groups of students and post university young professionals have heard how competitive the rental market is and are trying to get a head start on finding a rental property before the normal start of the summer surge.” There has been a rise in tenant demand across London. From property to rent in Maida Vale and property to rent in Little Venice, to properties in Earl’s Court and Kensal Rise.
The greatest increase in inquiries for rental properties in London appears to have come in the corporate sector. Marsh & Parsons report that a growing number of companies are looking for prime rental properties in London to attract and relocate senior staff to the UK. A recent report by the leading London-based lettings agency shows that the average budget for a mid-market corporate let increased to £747 per week by the end of March this year – a 14 percent rise on the average budget a year ago. With seasonal growth and an overall rise in competition across the lettings market as a whole, the average corporate budget is expected to increase further throughout the course of this year. Marsh & Parsons says that the number of prospective tenants searching for properties above £2,000 per week increased by a staggering 30 percent during the first quarter of 2011 compared to the same period last year. The Marsh & Parsons report said: “As mortgage lending for buy-to-let investors begins to show signs of increasing accessibility for those with sizeable cash deposits, it seems buy-tolet in prime Central London may see a real renaissance this year as wise investors look to take advantage of the booming rental market.” Source: Marsh & Parsons Estate Agents – Property to rent in Kensal Green, Earl’s Court