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The summer lettings market in London

The summer lettings market in London

Autumn has now very definitely arrived. We've had the last of the really sunny days and plenty of rain, indicating that we're about to start the weather changes that will lead us into winter in a couple of months time. The summer in London was a fairly momentous one this year, not just as a result of movements like Extinction Rebellion and the continuous uncertainty over Brexit but also the way the local markets responded to change. We've taken a brief look back over what the lettings market looked like in London this summer.

Less stock meant growth in rental yields

If you're considering becoming a landlord in Hackney, Islington or Shoreditch the summer lettings market in London indicates that this is a good time to jump in. There is currently a lack of rental stock in London and this is resulting in greater opportunities for landlords to make more in terms of rental yields. For July 2019 lettings data showed that the average rental cost of a new tenancy in the UK was £959 per month - this was an increase of 2.3% on 2018. However, rents in London increased by 3.1% on the previous year with the average cost of renting in the capital now £1,665 a month. That effectively means that average rents in London are now 73.6% higher than the rest of the country and this is magnified in the most popular areas.

More tenancy renewals means more security

Given the restriction on stock, the summer lettings market in London also revealed far higher levels of tenancy renewals than usual. Tenants are not that keen to move on - or perhaps simply don't have that many options to move on to. As a result, landlords are in a much more secure position and many have the leverage to increase rent year on year without the risk of losing existing tenants.

Brexit uncertainty is still a factor

It's just impossible to escape the Brexit effect at the moment and this has affected the lettings market like any other. However, while property sales have been slower as a result of more hesitation in the face of Brexit, lettings haven't experienced the same sluggishness. In fact, as some landlords have attempted to sell - whether that's in order to escape upgraded tax rules or just to create liquidity from assets - this has only served to increase the value of remaining lettings properties to tenants.

Summer 2019 was a healthy one for many landlords in London and a good indication that now is a great time to enter into this market. We are letting agents in Hackney offering a full range of property management services and we can ensure that you get the most from your investment in terms of value. If you'd like to find out more about us get in touch.

Stats etc from
https://homelet.co.uk/homelet-rental-index
https://www.lonres.com/public/resources/latest-publications/lonres-residential-review-summer-2019

26 September 2019Written by Andrew Blythe

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