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There are early signs of a recovery in the prime London lettings market, property investment specialist London Central Portfolio has reported.
Hesitancy on the part of prospective international tenants caused ‘a glut of short-let stock’ coming to the market last year, said LCP in its first quarter survey based on an analysis of its own managed rental portfolio.
That situation is changing but meanwhile younger tenants are taking up the slack. In the first quarter of 2021 almost 90 per cent of new tenants were 30 or under, it found.
‘These tenants are capitalising on historically lower rents whilst still available, as the promise of easing restrictions is slowly being realised. This contrasts with a reluctance of older tenants to move into London during the pandemic’.
Marylebone and Pimlico were the ‘hotspots’ with over half of new applicants wanting to move to these areas.
Almost 40 per cent of new tenants were from the banking and financial sector, while students accounted for just over 20 per cent.
Average time taken in the quarter to let vacant properties fell to 64 days, the lowest level since March 2020, but still above LCP’s historic average.
As fewer rental properties became available, rental discounts demanded on re-lets also fell back. ‘Rents have not yet returned to previous passing levels, however, the upward trajectory provides positive early signs ahead of the traditionally busy summer period’, said LCP.
‘Despite a third UK lockdown, the first quarter of 2021 saw a continued desire to live in prime London’, said LCP chief executive Andrew Weir.
‘Village-like neighbourhoods with good shopping facilities and outdoor recreation received the most demand.
‘Whilst it is too early to declare the return of normality, perhaps we are beginning to witness the positive effects of a successful vaccine roll-out and easing of government restrictions’.
In comparison to the owner-occupied sector, the rental market ‘continues to remain suppressed’, the property data agency TwentyCi has concluded. Its first quarter report put the average rental asking price across the UK at £1,331 per month, a fall of 2.4 per cent on the previous quarter. But it agreed that London ‘is seeing a significant resurgence in the number of people looking to rent’. This is fuelled by a 10 per cent fall, year on year, in rental prices within the capital ‘enabling many to opportunistically move into London whilst the market has availability and affordability’.