Lettings Market Update

PRIME LONDON LETTINGS MARKET DEALS ARE 195% UP ON LAST YEAR

Dexters, London’s leading independent Chartered Surveyor and Estate Agent, report that the Prime Central London lettings market has had a busy start to 2021 with over 330 deals agreed every week in January, up 195% on the same week last year, with over 36,700 tenants currently looking for a new London home, up 48% on 2020.

Dexters say that whilst life in Central London might be quiet at the moment, behind the scenes there are a lot of new residents renting property, no doubt looking forward to busier times in the summer and beyond. Dexters highlight that the last eight months have been the busiest PCL lettings market the estate agency has seen for the last five years, and the firm expects to see lettings values rise by 2% to 3% across PCL over 2021 and the volume of lettings transactions double.

Dexters reveal that the surge in lettings activity in the capital is particularly high in the West End and City of London areas and comes as tenants are looking in town because of attractive rents. Matt Huybrechts, Dexters Mayfair Lettings Director says: “tenants are excited to find good value properties in the West End and City of London districts, both of which have good access to the river, parks and everything that Central London has to offer.  Not only are people looking for pieds-à-terre but family homes as well and tenants are taking properties for lifestyle reasons, often they are working from home, have a bit more money to spend as a result of that and have one eye on a return to work and avoiding a commute.”

Matt Huybrechts adds: “For every tenant leaving Central London for the Shires we are seeing one return and look to be more central in London than they would normally be able to be.” Dexters say that at the heart of this is the fact that there are no tourists in London currently. Apartments in London that would normally rent by the night are all empty and this has seen a sharp increase in available accommodation and resulted in some bargains.”

Matt Huybrechts continues: "This is likely to be a temporary phenomenon since in the medium term there is a shortage of accommodation in London, particularly in the centre, and as tourists, corporate lets and students all return to central London we expect the market to resume where it left off in the early part of 2020. The majority of tenants want to live as centrally as possible but we are also finding the leafier areas of Notting Hill, Wimbledon and Hampstead are attractive and that nearby areas in London Bridge, Southwark, Canary Wharf and Docklands are also seeing large scale demand."

Dexters say that the majority of tenants currently registering are working professionals with jobs in Central London. As well as the West End and City of London, everywhere across London with access to green space has been exceptionally busy from Hampstead to Wimbledon and all points of the compass.

The upturn in the middle of London reflects a gradual return of people wanting to live close to their places of work as well as anticipated return to more exciting times in the coming summer, they foresee a full return to office working once the vaccine rollout is completed later this year.

With COVID-19 secure working practices in place, together with clear guidance from the Government that the property market remains open, Dexters report an extremely active lettings market in the capital. Andy Shepherd, CEO of Dexters says: “Despite a few negative trading statements being reported by some on-line lettings agents, to the contrary Dexters lettings activity has been extremely robust and our data shows that the London rentals market is in good health. The COVID-19 vaccine rollout will help to breath life back into central London and lead to a renaissance in the lettings market. London lettings properties are currently more affordable than pre-COVID and due to the lockdown and travel bans many tenants can afford slightly bigger budgets. With our well established COVID-19 secure working practices, including initial video viewings, we are able to handle the current tenant demand on behalf of the 30,000 landlords we represent. With 9,000 new Landlords asking Dexters to let their property last year we remain full of confidence for the future.”

Dexters has just carried out a survey of a sample of its 30,000 London Landlords, finding that 99% of them are committed to their investment in the long term and 78% are looking to grow their portfolios. During 2020 there was a lot of choice for domestic tenants, because of the lower number of tourists and business travellers, which enabled many tenants to take longer lets and move closer to central London. Dexters say this trend is likely to reverse in 2021 as COVID-19 issues recede and short-term lettings return, this is most likely to put upward pressure on rents.

Dexters say that the last eight months have been the busiest lettings market they have seen for the last five years. With money not currently being spent on holidays and socialising, many tenants are prepared to invest more in a better quality of home living, many choosing to move closer to work, family or leisure pursuits. Private outside space is a big attraction and longer term rentals of two or three years are becoming much more common.

The number of professional and corporate tenants looking to rent through Dexters increased during the second half of 2020, with more prospective tenants now registered overall than ever before. Dexters has recently found homes for employees of multinational companies including BP, Amazon and Facebook. Students are also starting to look for accomodation and the agency expects to see overseas student numbers increase throughout the course of this year.