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The return of city living - why this is great news for landlords

City living is top of the agenda for many eager Londoners hoping to secure accommodation in a prime location. The current market shows that tenant demand for rental accommodation in the city continues to rise to new heights, which is excellent news for local landlords.

In February, amenities and workplaces located in London were closed due to the pandemic, leading to annual rental declines of 9.8% in the capital as it was hit hard by Covid-enforced lockdowns. Since then, though, this figure has significantly recovered. In July, the figure had reduced to 3.8%, proving rents are truly on the mend.

Back in July, the easing of lockdown restrictions meant that workers could gradually return to the capital to work from the office, increasing the number of tenants living in major cities.

Recent findings from Zoopla show that demand for rental properties rose by 33% in August in comparison to the same stage last year. Furthermore, this is 79% above the 2017-19 average.

The Rightmove house price index also offers good insight into this month’s house prices, and how much you might have to pay to expand your portfolio or how much you might get if you decide to sell one of your homes. The research stated that in September the average price of properties coming to the UK market rose by 0.3% (£1,091) to £338,462, a new record.

In its most recent rental index, Rightmove found that asking rents in city centres around Britain were starting to recover as more renters plan a city move, with eight out of ten of some of the biggest city centres seeing higher rents than in June 2020.

The reason for a surge in city living demand

Capital cities always remain in demand regardless of the time of year. Landlords should be aware of the ongoing changes to how people live and work but also gain security knowing that tenants gravitating towards the city is inherent.

We work all around the capital but have grown a special reputation in Canary Wharf and the surrounding Docklands areas including Surrey Quays and Rotherhithe. All these locations are in the heart of the city where there isa cluster of residents, workers and excitement.

Recent statistics show that in August, the supply of properties available to rent was roughly one third lower than it was during August in previous years.

The supply of properties continues to be outweighed by the high level of demand and typically the more demand there is, the more prices tend to rise - whereas with more supply, they tend to fall.

Many notable universities are dotted around London meaning overseas and local tenants have been preparing to return in September.

Student tenants are a major driver of demand, as they contribute to the £2 billion worth of prime property purchases each year across central London.

Opportunities for landlords are in the city

London rents are down, but they are bouncing back and have bottomed out. Recent figures from HomeLet show that the average rent for tenants in London is currently more than £1,500, while research from Zoopla found that students in the capital pay well over £1,500 on average, too.

Meanwhile, further research has suggested that London’s rental market has turned the corner, with young renters returning to the capital and boosting rental prices.

Every year we meet with hundreds of tenants so we know exactly what they value the most. Landlords rely on the stability of long-term tenants, and they can benefit from this if the tenant is satisfied with the home and location.

Although the market is strong, as a landlord it is important to make sure all tenant needs are met. We can help also ensure that the property meets the tenants’ needs with our interior design service and provide an accurate figure of how much rent you could charge with a free online valuation.

Tenants are in a more secure position to afford these rates too as the Office for National Statistics recently reported that average earnings for those in employment are rising faster than rents, with an 8.8% rise in total pay year on year in June.

Various factors in the current rental market in London prove that the capital is a rebounding hotspot where landlords and tenants can reap many benefits.

For further guidance on any part of the lettings process, please contact us on info@hollandproperties.co.uk or give us a call on
020 7538 5554. For any other advice, have a read through our other blogs at https://www.hollandproperties.co.uk/blogs.

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