As the lettings market in London continues to thrive, a leading national estate agent reports a strong demand in the more expensive end of the rentals market, as well as a shortage three-bedroom homes.
Owning a three-bedroom property is good news for landlords in London in 2014. They make a safe investment thanks to having such broad appeal – prospective tenants include young couples, small families and older couples looking to downsize. At a time when there has been a surge in working from home, having a spare room to use as an office is also very attractive to tenants.
“The demand for three-bedroom homes for rent in central London is seemingly insatiable,” said Zoe Rose, Head of London Lettings at Strutt & Parker at the end of October. “As soon as we get a good one on our books, it lets in a flash. We recently let a three-bedroom lateral top floor apartment on Cranley Gardens in South Kensington for £1,300 per week within two days on its first viewing – and similarly we let a three-bedroom apartment on Ladbroke Gardens within one week for its asking price of £1,500 per week.”
Meanwhile, Strutt & Parker’s latest figures for lettings transactions in the third quarter of 2014 indicate that it’s the larger, more expensive properties that are performing most strongly. When compared to the same period last year, transactions are up 18.4 per cent for properties between £2,000-£2,999 per week, up 14 per cent for properties between £3,000-£3,999 per week and up 16.7 per cent for properties over £4,000+ per week.
However, lower priced properties costing less than £999 per week to rent, were down 7.5 per cent on last year – and properties between £1,000 and £1,999 per week were also down very slightly by 1.4 per cent.
Zoe Rose predicts that 2015 will be a good year for landlords with property in prime central London: “We are anticipating a slight uptick in lettings prices in prime central London for 2015 – a 2.5 per cent increase; and we’ve already seen two per cent growth for lettings in 2014. This slow but steady growth will be underpinned by the simple fact that there are still so many people out there that can’t afford to buy a home in London and these people will continue to rent. Not to mention the large number of people who enjoy the flexibility of renting – global, nomadic types who we refer to as ‘Glomads’. The threat of rising interest rates rising will also play an important contributing factor.”