Knightsbridge Lettings Insight
Date : 09 September 2010
We speak to Juliet Hill, Head of Knight Frank Knightsbridge Lettings and
discuss the local lettings market and what the next few months might hold.
How has the Knightsbridge Lettings market performed so far in 2010?
Stock in the Central London Lettings Market is down dramatically, by 55% in some cases. This means that if a property is newly refurbished and in a good location, it is letting quickly and at a good rent. The shortage of supply recently saw an instance of tenants being asked to put forward their best bids on a family house.
Tenants should now be aware of this shortage and it is important that once they find the right property they should act immediately to secure it. Landlords now have a chance to be more demanding and can negotiate more in relation to tenants release clauses, payments of rent up front, etc.
Another knock on effect of this shortage of stock is the strong performance for renewals. This has led to good rent increases for tenancies that are renewing where there is no fixed increase set out in the tenancy agreement.
Over the last 12-18 months tenants had found that they could look around for another property of a similar nature and negotiate a lower rental as the market was over supplied with property. The opposite is now the case - landlords have been able to ask for an increase in rent (in some instances 10-15%) at renewal knowing that a tenant looking elsewhere will find a shortage of stock and generally higher rents than when they commenced their current tenancy.
Our Knight Frank renewals department have strong experience in the London lettings market and in negotiating renewals.
What impact do you think the forthcoming General Election will have on the market?
At the moment, the biggest issue is the threat of a hung parliament, which could bring with it a period of indecision and inactivity. However, we envisage that this disruption would soon pass as the picture became clearer and people start get on with their lives. It is difficult to predict what will happen after the General Election, however, and to know which political party will take more of an interest in the property market.
It appears at the moment that there is a good level of recruitment in the Corporate sector, which is bringing a higher level of good quality tenants in the lettings market. It will be important that the political party coming into power will encourage rather than restrict the continuation of London being a major financial centre.