Zoe Rose, Head of London Lettings at Strutt & Parker, comments:
“The demand for three-bedroom homes for rent in central London is seemingly insatiable. As soon as we get a good one on our books, it lets in a flash. We recently let a three-bedroom lateral top floor apartment on Cranley Gardens in South Kensington for £1,300 per week within two days on its first viewing – and similarly we let a three-bedroom apartment on Ladbroke Gardens within one week for its asking price of £1,500 per week.”
Buy-to-let investors often believe owning a one or two-bedroom flat is a fail-safe option when it comes to attracting tenants and optimising rent – but all of our experience suggests that it's actually three-bedroom homes that are the most sought after at present. Indeed, Rightmove recently reported that more than a third of its top 5,000 most-viewed homes were all three bedroom properties.”
Owning a three-bedroom property is clearly good news for landlords. They are a great investment because they have such broad appeal – prospective tenants include young couples, small families and older couples looking to downsize. At a time when there has been a surge in working from home, having a spare room to use as an office is also very attractive to tenants.”
Strutt & Parker's latest figures for lettings transactions in the third quarter of 2014 also indicate that it's the larger, more expensive properties that are performing most strongly. When compared to the same period last year, transactions are up 18.4% for properties between £2,000-£2,999 per week, up 14% for properties between £3,000-£3,999 per week and up 16.7% for properties over £4,000+ per week.
However, lower priced properties costing less than £999 per week to rent, were down 7.5% on last year – and properties between £1,000 and £1,999 per week were also down very slightly by 1.4%.
Zoe predicts that 2015 will be a good year for landlords with property in PCL:
“We are anticipating a slight uptick in lettings prices in prime central London for 2015 – a 2.5% increase; and we've already seen 2% growth for lettings in 2014. This slow but steady growth will be underpinned by the simple fact that there are still so many people out there that can't afford to buy a home in London and these people will continue to rent.
Not to mention the large number of people who enjoy the flexibility of renting – global, nomadic types who we refer to as 'Glomads'. The threat of rising interest rates rising will also play an important contributing factor.”
We currently have 25% less property available for rent in central London than we did this time last year – tenant registrations remain high, up 63% year on year and we are completely oversubscribed. We anticipate a very welcome injection of properties coming on the market for rent in the next few months, as the PCL sales market continues to slow down and more home owners consider letting their home instead of selling.”
