What’s the supply and demand for buy-to-let properties in London? · 28/07/2024
Following on from my recent blog post about the state of the London property market – and in particular, what had happened to the rents London tenants have had to pay since the Credit Crunch – I said that property rents in London are now 1.56% higher than they were in 2018. As leading letting agents in London, Intire Lettings keep a close eye on property trends.
A private landlord in London phoned me after reading that blog post, wanting to know more about what was happening to property rent in various BS postcodes. I was happy to assist.
He contacted our Chelsea-based letting agency as his current letting agent in London hadn’t increased his rental income for a number of years, and he was concerned if he was getting the best return from his buy-to-let property investment in London.
The London property rental market is all about supply and demand: on the supply side, 1,231 rental properties have come up for let in the last 31 days in London.
It sounds like a lot – until you consider the fact that there are 48,530 rental properties in London in total: this means that means only 0.5% of the rental stock of properties in London are coming onto the market each month. It’s normally around 5%.
One reason for this lack of new rental properties coming on the market in London is the fact that tenants are staying longer in rented properties across all BS postcodes.
With this lack of supply, new tenants looking for rented properties in London have to pay more to secure what they want. And this is the crux of the matter – they want rented properties.
Older properties to rent in London that haven’t been maintained that still retain their wood chip wallpaper from the 1970’s and have threadbare carpets, however, have seen their rents drop. Good property management in London can help to update older rented homes.
Tenants in London want either modern rented properties with all the mod cons, or older style properties that have been presented to an exceptional standard – and they are prepared to pay for it. As leading rented property agency in London, we’ve seen this trend.
Rents for top-quality rented properties across London have risen by 1.1% in the last month.
Any old or modern rented properties in London put on the market in good or excellent condition will rent in a matter of days.
Interestingly, looking at London property values, the Land Registry have just released property values data. Throughout April 2023 (the latest set of data available), property values rose. When one looks at the regional picture, the South West average property values rose by 1.4% in the last month alone.
The difference doesn’t concern me, as the regional and local property values always even themselves out over the months.
So back to our property landlord in London.
Each property is unique, and so as his Tenancy Agreement allows him to inspect the property with 24 hours’ Notice to the tenant, we will be visiting the rented property in London next week with him to conduct a full and thorough rental income appraisal.