More people seek property to rent in London

With just one year to go until the 2012 Olympic Games, interest in property to rent in London is hotting up, and not just in and around the Startford area, where the main events take place.

Whether a property to rent in Battersea or a property to rent in Hammersmith, among a host of other areas, demand in London is at an all-time high, reflected by rapidly rising rents.

Research shows that the rents being asked during the Olympics are four times higher than normal, with some landlords in London reportedly demanding up to £10,000 a week in rent for their homes during next summer's sporting extravaganza.

Landlord Adam Feather has a property to rent in Little Venice near Maida Vale, which he plans to make available during the Games.

Mr Feather told the press that he recently had his home valued by Foxtons estate agents and was told that he could expect to achieve between £800 and £1,000 per week during the sporting tournament. This in spite of the fact that it is only let at £200 per week on a longer term assured shorthold tenancy.

Additional research by Lloyds TSB shows that it's not just rents that are booming as a consequence of the Olympics.

The study reveals that for the six years since London was awarded the Olympics, property values in the areas nearest the Olympic sites have appreciated by an average of £60,000. Average residential property prices in the postal districts close to the Olympic site have increased from £208,148 to £266,730, up 28%.

Over £30 billion has been added to the total value of residential properties located in close proximity to the UK Olympic sites since the announcement in 2005, with £6.4 billion in added-value to house prices in East London alone.

Nicholas Leeming, business development director of Zoopla.co.uk, said: "There's no doubt that the redevelopment to a number of areas across the UK as a result of the Olympics has had a positive impact on property prices."

People thinking of letting their home out during next year's Olympic Games are being offered expert advice by the National Landlords Association (NLA), including their ten top tips.

Homeowners looking to let their homes are being urged to follow the relevant regulations in order to avoid any problems.

London-based estate agents Marsh & Parsons is one of a host of lettings specialists that expect to be inundated with enquiries for property to rent in London.

Hundreds of thousands of visitors are expected at the Games and the Marsh & Parsons Corporate & Relocation Services team is geared up to cater for a surge in demand for short term accommodation in London during the 2012 London Olympics and Paralympics.

London will host the Olympic Games between 27th July to the 12th August 2012, and the Paralympic Games will take place between the 29th August and 9th September 2012.

With offices covering central, west and south west London, they offer a wide range of properties to rent on a short (2 week+) or long (6+ months) tenancy.

Let the Games begin!

Source: Marsh & Parsons London Estate Agent - Property to Rent in Maida Vale

Rent levels rise amid shortage of properties in London

A lack of housing supply in the centre of London is causing a ripple effect that could drive greater demand for properties in nearby areas in the capital, pushing rents even higher.

High demand for property to rent in London has caused rental prices to soar across the capital, particularly in primary locations, but prices could yet rise further.

The latest Knight Frank report shows that rents in prime central London increased by an average of 0.3 percent in July, taking the rise in the three months to July to 1%. Primary rents in the capital are now one percent higher than their previous peak in March 2008, due to a lack of rental accommodation in relation to soaring demand for rental homes, fuelled by greater demand among families and an influx of overseas nationals.

Tim Hyatt, head of residential lettings at Knight Frank, and president of ARLA, commented: "Rental demand continued to rise in July but stock levels are still constrained in certain areas. Rents have been boosted by the high levels of activity in the market as many families look to secure newer property before the start of the new school year in September."

"Like for like deals on this time last year are showing positive growth and we anticipate as ever the summer months being very busy for the London and Home Counties lettings offices."

The lack of homes to rent in Central London is expected to cause some ripple-out effect in other parts of the capital and possibly a little further afield.

This means an even greater volume of enquiries for homes to rent across the city, including property to rent in Richmond, property to rent in Wandsworth and property to rent in Parsons Green, among other locations.

Over the past year, a wide range of areas have witnessed a spike in demand, from rental properties in Putney to properties to rent in Stockwell.

With very few signs that rental demand is set to slow, rental prices are expected to grow.

A staggering 90 percent of landlords in London expect to see rents increase over the next 12 months, according to a poll of 500 private landlords/property investors conducted by the Young Group.

The property management specialists’ findings suggest that the London property market is now ripe for buy-to-let investors.

Research by national advisory firm Mortgages for Business revealed that average buy-to-let yields are continuing to grow on the back of flat property prices and soaring rents.

Figures provided by the firm show that the average rental return has increased to 5.8 percent, which is higher than many buy-to-let mortgage borrowing rates, thanks to a 35 percent increase in the number of buy-to-let mortgage products available.

David Whittaker, managing director of Mortgages for Business, said: "Languishing property prices and rising rents have created a perfect storm for professional investors and landlords."

"The yields on offer on investment properties are incredibly lucrative and with the owner-occupier market unlikely to change dramatically over the next 18 months the returns for investors will be healthy for some time to come."

Marsh & Parsons are one of many leading estate agents in the capital that have reported a higher level of enquiries for property to rent in London, partly because of rising London property prices, which is making the prospect of buying property in the capital increasingly unaffordable, forcing more people into rental accommodation instead.

The company said on its website that the usual seasonal increase in the number of tenants looking for property in summer has been ‘further fuelled by the would-be buyers who are being forced to rent, either due to being unable to secure financing or because they are struggling with the lack of choice on the sales market’.

Source: Marsh and Parsons London Estate Agents – Property to Rent in Stockwell

London rental prices are increasing ahead of inflation

Rental prices in the capital are increasing well ahead of inflation because many would-be purchasers are being forced to look at property to rent in London, rather than to buy, because they cannot raise the necessary capital required to get onto the housing ladder. A surge in corporate and international tenants has also contributed to higher rents.

Fresh research by Savills shows that rents in London, particularly in primary areas, have been rising ahead of inflation for at least the past 18 months. Rents are stood at an average of four per cent higher than at their 2007 peak, with genuine signs that they will continue rising, due to increasing demand.

"A number of different factors are now driving the market," said Yolande Barnes, Head of Savills Residential Research. "A boost in demand from international and corporate tenants is driving values in central locations, but rental growth is underpinned by strong and growing demand from would-be buyers unable to access home ownership. Constrained stock levels are creating competition and an upward pressure on rents."

No matter where in London, whether it is a property to rent in Balham, a property to rent in Brook Green or a property to rent in Clapham, demand is significantly outstripping supply.

Consequently, Savills forecast that rents in London will grow by up to seven per =cent over the whole of 2011, which explains why more landlords are now actively adding to their property portfolios.

Research by buy-to-let mortgage specialist Paragon supports the claim that rents in London are rising on the back of higher demand, with almost a third of landlords – 29 percent of respondents – admitting that their rental income had increased during the second quarter of 2011, compared to the previous quarter.

Nigel Terrington, Paragon Group's Chief Executive, commented: "Results from our latest research shows that rental income has increased steadily during the second quarter. Landlords are continuing to experience high levels of demand for their properties so have been able to make small increases to rent levels, without making accommodation unaffordable."

Property consultants Knight Frank believe that the growing influx of foreigners, particularly Europeans, moving into the capital is the main cause for the recent rise in rental values, with research by the company revealing that European tenants alone, secured 30.4 percent of all new lets in Central London during the first five months of this year, up from 25 percent during the same period in 2010.

Liam Bailey, Knight Frank's Head of Residential Research, said: "European demand has been a constant feature of the central London lettings market, with French, Italian and German tenants taking substantial shares of lettings."

Another key driver for the recent growth in rental demand has been the rise in demand from corporate tenants.

Leading lettings agents Marsh & Parsons report that the corporate lettings market in particular is continuing to show signs of resurgence as more and more companies seek prime rental properties to attract and relocate senior staff to London.

A passage from a recent article by Marsh & Parsons said: Such strong competition across the lettings market amongst tenants has meant that an increasing number are looking to 'lock-in' for longer tenancies to give them security as rents, in some areas, soar.

"For landlords these long tenancies are also highly attractive, offering security of tenure to minimise expensive void periods. With many Londoners either being forced or choosing to stay in rental property long-term, perhaps we are seeing a shift towards the direction of our European counterparts, for whom long-term renting is, for many people, a permanent choice."

As tight mortgage lending conditions for buy-to-let investors start to show signs of improving, it seems that the buy-to-let market in London is back in vogue, as more shrewd property investors take advantage of the booming rental market.


Source: Marsh and Parsons – London Estate Agent - Property to Rent in London

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-to-let 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

Demand for properties in Kensington continue to soar

Luxury home prices in Kensington appreciated to an all-time high in June, driven primarily by soaring demand from overseas nationals seeking to take advantage of a weak pound and sought a haven for their assets, according to a new Knight Frank report.

The study shows that the average price of a luxury prime central London property, in areas such as Kensington, has appreciated by 34 percent since March 2009, largely due to growth in Asian investors and a rise in the volume of people escaping the political turmoil in the Middle East.

"A lot of Middle East buyers already own property in London, but we are seeing them upgrading to a larger property to give them the possibility of a more permanent residence," said Mark Pollack, co-founder of Ashton Chase, an estate agent in North West London.

But not only is there greater national and international demand to buy property in Kensington, but research shows that demand is also growing for property to rent in Kensington.

In fact, tenant inquiries are also growing for rental homes in most neighbouring areas, with greater demand for property to rent in North Kensington and property to rent in South Kensington, mainly because of the growing number of overseas nationals coming into the country.

The current Eurozone crisis, in particular, is driving greater demand for property to rent in London, especially in primary locations such as Kensington, Chelsea and Mayfair, among others.

Knight Frank's London Lettings Index shows that since the beginning of the year, European tenants have secured 30.4 percent of all new lets in Central London, compared to 25 percent during the same period in 2010.

Excluding very strong year-on-year growth in the number of new French tenants, up 80 percent, the biggest growth in new tenant volumes came from the so-called PIGS countries: Portugal, up 62 percent year-on-year, Ireland (up 76 percent), Greece (up 33 percent) and Spain (up 73 percent) pointing to a rise in professionals and high-ranking executives re-locating to London.

Prime central London lettings volumes have increased by seven percent year-on-year and rents have risen by almost 26 percent since the low point they hit in June 2009, to hit a record high.

Liam Bailey, Knight Frank's head of residential research, comments: "European demand has been a constant feature of the central London lettings market, with French, Italian and German tenants taking substantial shares of lettings."

The rise in London rental prices of course means that landlords are yielding higher rental returns.

With tenant demand for London properties continuing to rise, almost a third of landlords – 29 percent – said that their rental income increased during the second quarter (Q2) of 2011, according to research by buy-to-let mortgage specialist Paragon.

The study reveals that 13 percent of landlords surveyed have increased rental rates across their portfolios by between two and four percent, saying they had increased rental income up to six percent.

Nigel Terrington, Paragon Group Chief Executive, said: "Results from our latest research shows that rental income has increased steadily during the second quarter. Landlords are continuing to experience high levels of demand for their properties so have been able to make small increases to rent levels, without making accommodation unaffordable."

Source: Marsh & Parsons Estate Agent – Property to rent in London, Chelsea, Mayfair

More enquiries for property to rent in London

More people are forced to rent property in London, instead of purchase, their home, because many would-be purchasers have been priced out of the housing market due to the recent credit crisis.

Paul Hackett, the Smith Institute's director, comments: "There is every reason to believe that home ownership levels will continue to decline and the private rented sector will continue to grow. An increasingly large proportion of households will in effect be excluded from the benefits of home ownership."

London's letting agents generally agree that demand for prime rental properties in the capital is growing, with greater demand for property to rent in Notting Hill and Kensington, among other sought after locations.

"The wider London rental market has been heating up for some time," said Peter Rollings, CEO of leading lettings agent Marsh & Parsons. "[Tenants] are still being drawn to areas like Kensington and Notting Hill to enjoy the kudos of living in such an exclusive postcode."

The number of mortgages issued for home purchases fell by over 50% between 2007 and 2010, due mainly to stringent mortgage lending conditions, research by Smith Institute shows.

Consequently demand for property to rent in Bayswater and property to rent in Holland Park, amongst other primary destinations in the capital, have soared, pushing rental prices higher.
     
A recent Halifax study suggested that Britain will become 'a nation of renters within a generation' unless more new homes are delivered.

The survey suggests that almost two-thirds of people without their own home believe they have little chance of getting a foot on the housing ladder, due to a lack of mortgage finance and rising property prices.
Almost half of people aged between 20 and 45 admitted they thought the country was becoming more like Europe, in which renting was considered the norm.

Richard Sexton, director of e.surv chartered surveyors, says that until more people qualify for mortgage finance the lowest end of the property market will remain subdued, and the rental market will continue to enjoy an Indian summer.

He commented: "The London rental market is in hyperdrive because of the lack of appropriate mortgage products for lower income buyers. Loan-to-value's over 75% accounted for less than one-third of all house purchases in May, compared to over two-thirds in May 2007, because less well off borrowers simply cannot piece together the large deposits demanded by lenders. The trend is reflected in the profile of property transactions."

He added: "This inability to get a mortgage and get a foot on the property ladder has built up a backlog of first time buyers who are marooned in the rental market. That in turn has driven rents and those high rents are making buy-to-let investment very attractive."

Adam Feather of London-based estate agents Robert Anthony says that rental demand is generally greatest for homes in primary postcodes, ensuring high demand for rental property in Mayfair, Chelsea and Fulham, among others.

Feather also points out that properties in Maida Vale, Little Venice and Westminster, generally spend little time on the rental market due to a high number of applicants looking to rent in these areas.

Source : Marsh & Parsons - Property to Rent in London