Press Release: A Month in Lettings by Emilie Dawes
Tue 02 Sep 2008
There is currently an oversupply of rental property throughout London. Tenant demand is close to one of its seasonal peaks (June to October being the busiest months) but the volume of property on the market continues to exceed demand.
People who were trying to sell their homes earlier this year and have been unable to achieve the prices they wanted have decided to let out their properties instead. 30% of properties on the market with Marsh & Parsons in Kensington & Chelsea were previously on the sales market - or are currently being marketed for both sales & lettings.
The effects are being felt hardest in Central London particularly in boroughs like Kensington & Chelsea where the number of properties on the market for lettings is at an unprecedented high. This time last year we had a register of around 360 properties in our Kensington & Chelsea offices. This year we have a register of 618 properties a 72% increase.
There has been an increase in the volume of properties being let compared to last year (the number of properties that we have let is up 48%). However, tenants have more options and have become correspondingly demanding. The average number of properties they view before making a decision has risen from four or five this time last year to 12 properties today. Their expectations are very high in terms of the quality a property has to be in excellent condition to be let at a good price.
Prices have fallen as the level of competition between landlords drives prices down. In August 2007 the average 550 square foot two bed in K&C could be let for 525 per week. Now, rents have fallen to 450 per week - a decrease of 14%. A property in Talbot Road, Notting Hill, was valued last year at 500 per week and this year has had an offer accepted at 400 per week.
Its not all doom and gloom and there are some bright spots. For instance, the oversupply is less pronounced south of the River in areas like Clapham, Balham, and Battersea. Prices are fairly stable thanks the popularity of the areas with young professionals and new graduates. Interestingly, many of the City firms with graduate relocation programmes who we work for have told us their graduate intake has only been fractionally reduced this year.
And things at the very top end of the market are remarkably positive. The volume of properties let for more than 2,000 per week is up by 40% on last year, showing that despite the credit crunch, there are still a healthy number of applicants moving to or returning to London willing to pay premium rents, indeed some relocation agencies are actually reporting an increase in new clients.
Furthermore, we usually see a sharp seasonal increase in the number of prospective tenants in September usually in the 200-600 per week price bracket. That will help balance out the oversupply of property and should therefore begin to firm prices up again elsewhere.
Emilie Dawes is lettings director of estate agent Marsh & Parsons