According to Paragon Bank data, tenant demand for London’s rental market is surging. The spike in rental demand reported was significant, with 85% of Greater London landlords having seen a rise in demand in the last 3 months. These findings have coincided also with decreased void periods. Just 21% of landlords have experienced void periods in the last three months, compared to 31% asked in the same period last year. Tenants are also renewing existing tenancies early – or agreeing to longer-term tenancies…
“We know that the private rental market in London was hit particularly hard by the Covid pandemic but has rebounded strongly since and these latest figures provide further evidence of this”. – Richard Rowntree, mortgages MD for Paragon Bank
London’s rental market: Supply/demand
Whilst increased demand is positive, it is unfortunately met with a critical shortage of rental stock. Yields in central London are the lowest in the country due to high property costs. Couple that with the existing and upcoming/suggested policies supposedly intended to protect tenants (when it’s tenants who are likely to suffer the most as a result); the future of London’s rental market seems uncertain. With London rents having risen the most in about 5 years (as demand for rental properties continues to exceed supply); tenants are already suffering.
London’s rental market and policy: the bigger picture
If tenant well-being was the genuine reason behind what appear to be left-wing policies made by right-wing politicians, surely, they would want tenants to have somewhere to live at a price they could afford? Disincentivising smaller landlords to the point where they are forced to sell is clearly going to have a negative impact on both tenant’s well-being and London’s rental market at large.
Landlords and agents are two of the most demonised groups. Tenants, of course, should be protected. For them to be protected, they do need somewhere to live, at a price they can afford. With rent, however, having risen (predominantly due to supply/demand issues); capping rent is just one of the many examples of a proposed policy that not only ignores the bigger picture, but, if implemented, would have a devastating effect on London’s rental market. Scrapping the ability of landlords to remove tenants at short notice probably hasn’t helped either.
Policies need to be put in place that make being a London landlord an attractive (or at least a viable) proposition. We are currently looking at a situation whereby landlords, in many cases, are being forced to leave the market, meaning less places for tenants to live – and rent that is increasingly unaffordable.
“As one of the world’s greatest cities, London is extremely dynamic, constantly evolving as a diverse mix of people come and go, calling it home as they study, work, travel or raise families. This is why it is important for the capital to have a thriving private rented sector, enabling people to benefit from the flexibility that rented homes provide” – Richard Rowntree
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