Average rents in London have risen but were down month on month by 4.6% in April 2020 and by 1.5% versus May 2019.The average rent in the capital now stands at £1,598 a month.
The shortfall has been made up since the market re opened. The most recent figures from the Homelet Report give an unsurprising outlook, especially for Greater London. This is the first time in at least 3 years since we have seen negative figures reported. Over two thirds of tenancies in London and the South-East have renewed in Quarter 2, in most cases at the same rent. The good news is that rental values can start to stabilise over the next quarter as there isn’t an over-supply of homes placing downward pressure on rents.
Avoid The Voids
As a Landlord myself, the dreaded void period is one of the things that keep all Investors up at night. For homes that are coming up for re letting, it is wise to err on the side of caution and aim to achieve rents at last year’s levels.
Good presentation and correct pricing are essential to attracting reliable tenants quickly, at a good market rent. This is all about setting up your stall well, being set for success. Your investment is offered in competition, not in isolation to the other homes in the marketplace.
Given the uncertainty that may lie ahead, this strategy will help to insulate you as an Investor by consolidating your income for the next 12 months. We are now entering a seasonal shift in demand where June to September is the busiest period. Enquiries for corporate relocations are down as is demand from students with uncertainties about what is happening with Universities.
Whilst I’m no forecaster, (that is the job of an Economist) ,there are only two types of forecasters; Those that don’t know and those that don’t know that they don’t know. In truth, the only reliable indicator of how the market will look is when the Government furlough scheme ends in October. The market sets the market, and I encourage all Investors to simply to focus on the present. In recent times I have advised that Landlords take out Rent and Legal Protection Cover for added peace of mind. This is something I can assist with, so give me a call if you want to know more.
June’s Homelet data may be a reference point to evidence if a new trend is emerging and if the direction of travel is different to one that we have grown accustomed to.
If you have any queries or would like to discuss any aspects of this month’s research, don’t hesitate to get in touch. You can write to me [email protected] or call the office for a chat on 020 8366 9777