Rental demand still strong in London.
Whilst average rents in many areas of London continued to fall, rental demand from tenants remained buoyant in London, in Q2 of 2017.
These two factors were contributory reasons for the slowing pace of decline in rents, possibly a sign that stabilisation of the rental market in London might be just around the corner.
The consistent demand is also encouraging for buy-to-let landlords in the capital.
Within London, Zone 1’s appeal strengthened and there were an increased number of central London searches in Q2 compared to the first quarter of the year. Zone 2 maintained its position as the most in-demand area.
The data revealed that domestic renters form the biggest percentage of London tenants at 39%, while the proportion of renters from Asia and the Middle East increased to 13.1% in the second quarter.
Ed Philips, managing director of lettings at Foxtons, commented:
We’ve spoken before about how the lettings market traditionally benefits from uncertainty in the sales market, as potential buyers turn to the flexibility offered by renting.
"With the sales market in the capital still a long way from returning to consistently strong growth, an increasing number of Londoners are indeed being drawn to the rental sector.
Andrew Turner, chief executive at Commercial Trust, stated:
London’s importance on a global scale economically, will always give the capital a magnetic draw for tenants.
“Whilst rents were rising, the price of property remained prohibitive and many people had little option but to look for rental properties outside of London, as they were priced out of the housing market. However, there is always a need for others to remain close to the City centre.
“Demand for rental property continues to help drive the buy-to-let market in London’s micro-economy and shows little sign of ebbing, so it would be no surprise to see prices rebound in the coming months.
"This represents a great opportunity for buy-to-let landlords to review their portfolios and look at what London and the surrounding areas may have to offer.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.