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05/09/2012

Students flying high - lettings market comment



Well, what a summer we have had here in London!  The weather was disappointing in July and August but the excitement surrounding the Queen’s Jubilee and the Olympic and Paralympic Games has certainly made up for it.  London has been shown in such a fantastic light throughout these last couple of months with the grand finale being these last ten days watching our Paralympic athletes who have been an inspiration to us all with their courage, determination and brilliance. 

It is 100% back to business throughout the whole of our city now that schools have gone back and all the festivities are almost over.  Every agent in town should be pounding the streets as enquiry levels have soared since last weekend.  We anticipated this marked increase in activity and while we were busy at the beginning of August, we are now frenetic. 

We have been inundated with high net worth student enquiries from those wanting to get settled prior to the start of the new academic year.  They are coming from all around the world and their tenancies are generally being guaranteed and paid for by their parents who are paying up to circa £1000 per week.  We have had two properties in the last week where three students were bidding against each other.  We do not believe that we will have any studio or one bedroom flats left for letting if this frenzy continues. 

It is not only students who are trying to get settled before the academic year begins - we have noticed an increase in enquiries in all levels of the market and many prospective tenants, particularly families who have avoided London during the Olympics, are now panicking to get settled and having to juggle moving with the new school term.  There is a marked increase in enquiries between £5,000 and £10,000 per week.  We have two interested parties considering a house within this price bracket which is currently undergoing refurbishment and a letting may well be agreed before the kitchen is even fitted.

It must not be forgotten that the prime central London lettings market has been affected by the Eurozone crisis, not least because there are now 40% less jobs in the City than in 2007 and rents have fallen marginally as a result.  Although there is a high demand for all rental properties, it is essential that they are priced correctly and not too bullishly so that available stock lets in September rather than suffering extended voids.  There is more available stock than at this stage last year but we anticipate this frenzy of activity will continue throughout September and well into October thus bringing stock levels down.  June and July are always known as ‘change over’ months for tenants and it is noticeable that tenancy terminations have dropped dramatically in August and September, indicating that tenants are settled and are not looking to move within London.  Increases on renewals are up on the last couple of months, another indication that tenants are prepared to pay to stay. 

So the order of the day is back to work with gusto and make hay while the sun shines as historically the market quietens down towards the end of October until the middle of November.  We hope that you have all enjoyed a wonderful summer.



Lucy Morton - Senior Partner. Tel: 020 7306 1631. Email: lmorton@waellis.co.uk


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