2009 Market Round-up
Thu 03 Dec 2009
The second half of 2009 has seen a definitive shift in market conditions for lettings. Following 18 months of falling rents, the last six months have seen the market stabilise - and indeed rise in a number of cases - compared to the same time last year. The shift can be clearly attributed to two main factors; the first being the reduction in available property to rent as the reluctant landlords of 2008 take advantage of the more buoyant sales market and decide to sell as opposed to let; the second being the traditional seasonal increase in tenant demand over the summer and autumnal months. This has led to the supply and demand balance finally moving back in favour of landlords.
We have seen a number of properties we let in 2008 be re-let for approximately 15-20% higher this year as tenants bargaining power eases. It is worth bearing in mind, however, that prices in Kensington & Chelsea fell by as much as 30% when supply of rental property was at its peak, therefore rents are still largely lower than many landlords were achieving in 2007.
At the very top end, the market has been especially positive with a surprising amount of corporate relocation taking place, with particularly strong demand for top-end family houses. We recently let a beautiful 5 bedroom house in Pembroke Gardens Close for well over 3000 per week to a large corporation relocating a family from Australia; it seems many companies are beginning to relocate their top executives once again. Indeed our Corporate & Relocation Services department had one of their busiest months on record in October.
As we move into the New Year it seems that the same trend is likely to continue; there will be far less property available to let as many landlords choose to sell in preference as the sales market continues to strengthen. With this in mind, for those existing landlords and indeed for new buy-to-let landlords, the future looks positive. Rents will almost certainly continue to strengthen as demand stays strong from tenants due to increased relocation into London as the economy continues to improve, as well as would-be first time buyers still being forced to rent as they struggle to get a mortgage without a relatively large deposit.