Rents for residential properties fell across parts of London in quarterly terms as the supply of properties coming on to the private rented sector increased, a report showed yesterday.
The latest research from Benham & Reeves Residential Lettings reveals that rental price growth in the April-June period of this year slowed in many of the post codes covered by the letting agent, with some showing rental decreases, owed in part to a rise in private rented housing stock on the market coming mainly from the build-to-rent sector.
Benham & Reeves is urging buy-to-let landlords in the areas it covers, predominately located in Zones 2 to 3, and to a lesser extent Zone 1, to take a closer look at the market to work out how best to protect their property investment.
The company reports that the best performing areas are Acton and Ealing in W3, Wapping and Shadwell in E1W and Earl’s Court, Kensington and Chelsea in SW5, which are all showing reasonable rental increases of around 2%.
But across the majority of postcodes there is an even spread of between 0% and 2% rises, and between 0% and -2% drops.
To help protect their investments, the letting agency says that almost one in five – 17% – of landlords are taking the business decision to renew contracts with existing tenants with no rental increases in order to keep good tenants and avoid any possible void periods.
Areas to record rental decreases in the last quarter include Golders Green, Hampstead and Barnet in NW11, Marylebone and Westminster in W1H, South Kensington and Knightsbridge in SW7, Hammersmith and Fulham in W6, Barnes and Richmond upon Thames in SW13, South Lambeth, Vauxhall, Battersea, Clapham and Stockwell in SW8, which have all witnessed rental drops of up to -4%.
Marc Von Grundherr, letting director at Benham & Reeves Residential Lettings, said: “The drops are all in desirable areas that continue to be very popular.
“What we are seeing is more stock coming to the market thanks to large developments and that is giving tenants more choice on places to rent and more power to negotiate lower rents.”
Sasha Hanson-Markham spokes-lady for the British Landlords Association has said “supply and demand has always been a major factor for rents; that is true for many other sectors too. We have plenty of housing in the north east and north west area’s like the Wirral and Grimsby, hence the rents in these area’s typically for a 3 bedroom house is £425 PCM. Similar property in London would be £1800 PCM”.
Source; Landlord today