Certain areas of London are seeing an improvement in rental levels in the lettings market, news which comes in great contrast to recent damning reports about the future of the capital as an investment hub.
The latest research from Benham & Reeves Residential Lettings found that many areas of London are seeing an upturn in the market, specifically in suburban locations. Colindale, a north London location, saw rental rises of 4.7 percent.
Several prime London postcodes also saw average rental values rise by four per cent or more, fueled by new developments. Fitzroy Place just north of Oxford Street propelled rental price growth in the £700-£1200 per week bracket. Wapping anticipates a similar effect from units in the new London Dock development when they enter the market in January.
The findings also proved that rental growth was not the only reason for landlords to celebrate. Lease renewals are up with Knightsbridge, an area which has seen stagnant rental growth, reporting a staggering 85 per cent renewal rate. This is reflected in the average length of a tenancy, which during 2016 was 17 months. This figure has previously stood at less than a year. Thus whilst landlords may not be seeing the rental growth they desire, a consistent income with fewer void periods is also desirable.
Lettings Director of Benham & Reeves Residential Lettings, Marc von Grundherr, said: ‘There is no doubt that landlords have had a tough time of late. Rising taxes and stamp duty rates have taken their toll and it’s been hard to offer many crumbs of comfort to our landlords. These latest figures, however, demonstrate that for those who are able to ride out the tough times, the market will eventually turn back in their favour. We don’t want to be too optimistic just yet as things are still undeniably difficult for many amateur property investors but nothing could be as bad as 2016. Roll on 2017.’