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London rents fall as family homes fail to sell
Jonathan Prynn, Consumer Affairs Editor18.11.08
A HUGE glut of unsold London homes has sent rents tumbling by up to 20 per cent since the start of the summer.
Families that cannot sell their properties are instead becoming "amateur landlords" - but are finding that demand has dried up.
Rents are expected to fall further as the economic downturn deepens.
Surveyors expecting further falls in rents in London outnumber those expecting rises by three to one, according to research by the Royal Institution of Chartered Surveyors. This is a big turnaround since the summer when equal numbers predicted rises and falls.
The rental market has been hit by the wave of homes being put up for rent and a slump in demand from companies and banks relocating staff to London.
Lettings agents say it is the sharpest downturn since the aftermath of 9/11, but this slump is expected to last much longer. Emilie Dawes, lettings director at Marsh & Parsons, said: "The £1,000- to £2,000-a-week bracket - family homes typically occupied by bankers from Europe or America - has definitely been significantly affected. Also hit have been two-bedroom executive apartments, particularly along the Central line. Demand for these is down by 40 to 50 per cent."
She said rents in areas such as Kensington and Chelsea have fallen by as much as 20 per cent "and sometimes more".
Agents in other areas of central London favoured by wealthy financiers have also reported a huge fall in demand - to the point of none at all.
Christopher Ames of Best Gapp & Cassells in Belgravia said: "I would like to give you a figure but I haven't let anything. Asking prices have come down but there is no one looking."
Smaller flats are still being chased by first-time buyers who are holding off or cannot secure a mortgage.
Pimlico agent Edward Reeve said: "Rents for one- and two-bedroom flats in the £1,350 to £2,000 a month range have increased but it is apparent there is less demand for higher-priced flats. One recent letting at £2,900 per month was achieved after a two-month void. The previous letting was £3,445."
New landlords were advised to be sensible. Ian Potter, operations manager of the Association of Residential Lettings Agents, said: "Many landlords have entered the lettings market in the last year without perhaps planning to do so. I would urge these amateur landlords to exercise caution as it is a position of no little responsibility."
Reader views (7)
Glad Munro is doing well out of it....good o, old chum, what o scoff scoff , snort
- Tim, London
I had three lots of tenants bidding for my four bed flat in West Kensington. But I decided to go for the asking price and the first to bid for it. I've been in the business for 7 years and the prices are seasonal. The areas are also very important. Keeping one's properties in good shape so they're desirable is an expensive must. Some properties are over priced, but the right price will always rent.
- Munro, London
Well as one of the most expensive cities to live in the world, if not the most expensive, it is hardly surprising. If you don't actually own the property you live in in London then what you pay each week just to put a roof over your heads, eat decent meals each day and put some clothes on your back would keep most dwellers of the world in the lap of luxury for a month or more. Some people are obviously doing real well out of it.
- Len, Perth, Australia
Great, can finally go out for a drink without having to listen to the sound of smug people telling each other how much the value of their property has increased! RESULT!
- Alan, Brighton
Families are renting out their houses?, well where on earth are they going to live then. More like they can't sell their second or third properties.
What a pity, couldnt give a stuff. GOOD
See that one and two bed flats are increasing in rent. Any camp sites in London?, bring on the shanty towns, only a matter of time....
- Anon, London
Greedy piggies shouldnt have more than one house anyway. I hope you end up losing them and your little piglets lose their tuition fees because of it.... ha ha ha. Could rent them out to a family of nigerians I suppose with twenty kids, sure ealing council will pay fifty grand a week to you...pay for more oatmeal for your troughs
- Anon, London
Rents in the good and desirable parts of Central and West London have fallen by well over 25% since the spring 2008.
Like everything else, a successful let is the result of a realistic and attractive monthly rent for the tenant.
It might be better to get a bit less and have a reliable long term tenant.
I rented out my 4 bedroom house in SW within 2 days.
- Weddigen, London SW6
