True to form – June remained a very busy month with a high number of students in the market looking to secure apartments before heading home for the summer break. We predict a further surge in demand during September with students returning back to London for their studies and new employment contracts starting across London.
Since May, over 60% of the properties we’ve let have been one bedroom apartments, around 30% two beds and under 10% studios. Three bedroom flats are in short supply hence the very low number that have been let. With higher demand for smaller flats, two bedroom properties have in some cases experienced longer voids and many have seen reductions in rent in order to generate interest. Two bedroom apartments over the £850 per week level have experienced the greatest voids.
We have seen a number of our clients reassess their portfolios due to the recent updates to mortgage tax relief and the increased stamp duty on investment properties, meaning they’re investing in less and liquidating more.
Over the last three months it’s been more of a tenant’s market with greater availability of stock – tenants have been able to negotiate harder to obtain more favourable terms – whether this be price, furnishing, break-clauses or start dates. We’ve prepared clients for these scenarios and in many cases compromising on certain aspects of a letting to secure a good tenant makes sound commercial sense in the long term.
Stock levels have been healthy over the summer, but with a lack of transactions in the sales market this could then translate to a shortage on the lettings side as fewer investment properties come to the market.
Covent Garden and Soho have a number of well established institutional landlords, meaning stock levels tend to remain fairly consistent, but with a lack of new private rental properties this could tip the market back in the landlord’s favour after a busy autumn market.
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