Tag Archives: London

London’s rental prices reach record high weekly price Buy to Let News, Landlord News, Latest Articles, Lettings & Management, Property News

New figures show that London’s rent prices have reached record highs, as rising interest rates and lack of supply put pressure on rents, Foxtons reports.

In October, rents reached a new record high of £571 per week, exceeding the previous high of £553 per week in September 2022.

This is a 4% uplift in comparison to September, which would typically be the peak for the lettings market.

Central London continued producing the highest average weekly rent this year at £643 per week, a 29% increase on prices seen in October 2021.

22 renters competing for every new property

The estate agent also says that there were 22 renters competing for every new property in October, which is higher than any October the firm has recorded in 2021, 2020 or 2019.

While the number of renters competing has decreased from September, October’s 22 renters per new instruction is 40% higher year-on-year.

In October, demand for properties in London followed the usual seasonal downward trend, with a 38% reduction in renter registrations from September 2022 to October 2022.

However, when compared to October last year, tenant registrations are still 2% higher.

Renters are looking towards the outer zones

And with intense competition in the capital, renters have turned their attention towards the outer zones.

In South London, registrations are up 37% from 2021, and in West London, registrations are up 57% from 2021.

Applicants’ weekly budgets remained much higher than they typically do in October.

The average weekly renter budget last month was £485, which is more than £20 more than the average budget in October last year. Year-to-date, budgets are 7% higher compared to 2021.

Renters are spending over their budgets

For the second month in a row in 2022, Foxtons saw renters spending over their budgets to secure a property.

In October, renters spent 101% of their registered budget, a 3% increase compared to October 2021.

Gareth Atkins, the firm’s managing director – lettings, said: “Throughout our front offices and within our renewals team, October has proved to be a very busy month. Competition for London lettings is intense.

“Average rent prices have reached a new record at £571 per week, and we’re seeing a return to renters spending over their registered budget at 101% on average – a number we haven’t seen since before the pandemic.

“One reason for the competition is the rising interest rates, as renters who were considering homeownership are now looking to renew or find their next rental.

“Another reason is the sheer lack of supply.”


Rents set to outperform property prices Buy to Let News, Landlord News, Latest Articles, Property Market News, Property News

Rental value growth is predicted to outpace property price growth over the next five years, says one leading property expert.

Nicky Stevenson, the managing director of Fine & Country UK, says that a shortage of stock, increased borrowing costs, and economic pressures are underpinning the market.

She said: “Rental records continue to topple month-on-month across England and Wales.

“The upward price trajectory continues as the gap between supply and demand shows little sign of easing.”

‘Rental threshold of a prime market property’

Ms Stevenson added: “The rental threshold of a prime market property across England and Wales now stands at £2,750, with the average prime rent at £3,661 per month.

“In both the main and prime markets, value growth in London is most marked.”

The average rent for a prime property in London has now reached £5,000, Ms Stevenson says, which is close to £200 per week higher than it was a year ago.

She also highlights that apartment living is popular again in many city centre locations and this is underpinned by news from Rightmove which reports a significant uptick in demand for smaller apartments, with studio flats overtaking one-bed properties as the most in-demand apartment for renters.

More than 4m households live in private rented accommodation

Ms Stevenson also notes that more than four million households live in private rented accommodation, the majority in homes owned by private landlords.

And, according to the British Property Federation, institutionally owned, professionally managed, build-to-rent properties are set to account for more than 8% of private rented households by 2032.

Ms Stevenson said: “Many landlords are unaware of this sector.

“HomeLet survey data suggests just 48% of professional landlords have heard of build-to-rent, falling to less than 1 in 5 of accidental landlords.

“The number of build-to-rent homes is forecast to increase five-fold over the next decade, from 76,800 homes today to 380,000 in 2032.”

She added: “Although the sector has traditionally focused on London and major regional cities, close to half of all local authorities now have build-to-rent in their housing pipelines, over double the proportion in 2017.”

Marked slowdown in annual price growth

Speaking about property prices, Ms Stevenson notes that Nationwide report a marked slowdown in annual price growth to 7.2% in October, compared to 9.5% in September, with a month-on-month price fall of 0.9%.

This is the first monthly fall since June 2021 and the most significant correction since June 2020.

Across the prime markets of England and Wales annual property price growth is currently 8.8%, and the average price of a prime property in southern areas is in excess of £1 million.

She said: “While many forecasters are predicting price corrections in the market, this needs to be considered in the context of the unsustainable growth in the market since 2020.

“Correct market pricing by agents is critical as the leeway between marketing price and ‘real’ price becomes more apparent.”

‘Price differentials are a better way to consider a market’

Ms Stevenson added: “Price differentials are perhaps, a better way to consider a market.

“A 10% fall on a property priced £500,000 equates to £50,000, a similar fall in a property priced £1 million is £100,000.

“Given the substantial price rises seen in the market over the past two years, there is only a low risk of negative equity for the vast majority of purchasers.”


Introducing Mark Edwards Guest Articles, Guest Columns, Latest Articles

I first met Mark Edwards back in 2002 when he was a client of my former mortgage brokerage, and also an HMRC Tax Investigator. Mark Edwards - Residential Property Landlord and Finance Broker

Mark Edwards - Financial Adviser and NACFB Broker

I instantly recognised Mark’s ability to comprehend and break down complex problems and to research and present solutions effectively.  These are the hallmarks of a good finance broker.

Within a few weeks I had convinced Mark to give up the safety net of his employment and to join our team at The Money Centre as an Associate Partner. Mark went on to be the #1 fee earner in the business for several years, regularly producing in excess of £1 million of annual fee income.

Based in London, Mark now owns and manages a portfolio of 40 investment properties with a value of circa £12.5 million as well as running his own successful brokerage. I recently asked him why he is not sat on a yacht somewhere in the Caribbean these days – his reply was “I’d be bored” – I can relate to that too 🙂

Mark and I are old friends and kindred spirits in many ways. We both relish in the challenges and rewards associated with helping landlords to progress to another level. I am delighted that Mark has agreed to work alongside me again and to help Property118 readers by writing articles about niche lending criteria and financing strategies.

UPDATE – you can read Mark’s articles and Case Studies HERE

To view Mark Edwards Property118 member profile please click here

Contact Mark Edwards

 


London’s cheapest home is a £41,000 boat House Prices, Latest Articles, Property Maintenance

A garage hitting the market with a staggering £525,000 asking price in upmarket Knightsbridge, West London, has prompted a look for the cheapest homes for sale in the capital.

For homeseekers looking to buy outright, the cheapest home for sale in London is a one bed renovated houseboat in the Paddington Basin is on the market for £41,000, according to online property portal Rightmove. Continue reading London’s cheapest home is a £41,000 boat


Newham council wants to traffic tenants out of London Buy to Let News, Latest Articles, Property Market News

Housing minister Grant Shapps has accused Newham Council, East London, of ‘playing politics with peoples’ lives’ over a radical plan to shunt homeless families out of the capital because benefit caps do not allow them to move in to local buy to let properties.

The council has a housing waiting list of 32,000 people and claims cuts to housing benefits mean tenants can claim a monthly allowance of between £250 for a one-bedroom flat and £400 for a four-bedroom property. Continue reading Newham council wants to traffic tenants out of London


Londoners earning less than £52,000 can’t afford to rent Buy to Let News, Cautionary Tales, Latest Articles, Lettings & Management, Property Market News

Renters in London need to earn around £52,000 to let a buy to let home, according to figures from homeless charity Shelter.

The charity reckons 65% of non-home-owning Londoners have given up hope of buying a property in the neighbourhood where they live. Continue reading Londoners earning less than £52,000 can’t afford to rent


City Landlords Turn Empty Bank Offices into Luxury Flats Buy to Let News, Latest Articles, Lettings & Management, Property Market News

Hard pressed landlords are looking at switching tough to let offices in the square mile to swish apartments for City high fliers to make ends meet.

Pension funds and developers are buying up disused commercial buildings that were home to thriving banks and financial services companies in Central London. Continue reading City Landlords Turn Empty Bank Offices into Luxury Flats


London Council Opens Letting Agency Buy to Let News, Latest Articles, Lettings & Management, Property Market News

A London council has set up the first local authority full management lettings agency for rental homes in the capital.

Harrow Council has run a property finding service for tenants but is extending the service to manage homes for landlords. Continue reading London Council Opens Letting Agency


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