More London property owners might wish to think about putting their property up for rent, as London property rent returns now appear to be improving, because of the ever-growing number of people seeking property to rent in the capital. In recent months, there’s been a remarkable shift in supply and demand for land to rent, together with the availability of excellent quality rental properties in London decreasing.
London, a booming cosmopolitan city, has long been a favorite place to rent land.
More tenants are now negotiating extensions to their current rent contracts, because of a relative lack of other properties to rent, according to various London Estate Agents, such as Foxtons, a company which boasts a higher renewal rate.
ARLA research, conducted across UK landlords and letting agents revealed that the supply of land to rent has dropped, while leasing demand has improved, partly because fewer people are currently buying land. Ian Potter, operations director at ARLA, said: “Lots of individuals now in a position to purchase are fighting to find the right property, since there is also a shortage of both properties for sale and realistic mortgages.”
In the last quarter of this past year, an average 41% of ARLA members surveyed reported much more renters than land available to lease.
Peter Rollings, the managing director of a top London letting agent, commented: “Stock seems to be a problem in the rental sector. It really disturbs me as to where all this property has gone!
“In reality, more people are only sitting on the fence right now and are opting to not rent their property as they wait to find out what happens in the revenue property marketplace.”
The development in tenant demand also comes at a time once the source of new build residential property coming on the rental market is decreasing. The National Housing Federation report that the amount of new homes built in England and Wales is expected to fall this year for the lowest level since 1923.
Home developers are on path to build under 123,000 homes between April 2009 and March 2010, 18,000 fewer than were constructed during the last financial year, due to the fact that most home builders cut back improvements in light of the recession. chirii in londra will see the lowest total of new property because 1923⁄4, when only 86,000 homes were constructed, excluding the war years.
“As demand exceeds supply we are faced with a new challenge - the best way to provide enough top notch rental properties to fulfill this requirement,” Potter added.
The decline from the London property rent market combined with a rise in demand for property to lease is in turn causing a fall in rent void periods and a rise in rental rates and yields across a lot of London - an appealing proposition for rental property investors.
Since January, Foxtons, by way of example, have had 20% more applicants for rented property in this time last year.