As landlords in the rest of the country continue to see rental achievements go through the roof, landlords in London are being advised to be realistic about their charges as the property pendulum starts to swing the other way.
Throughout the last five years of continued growth in the private rental market property investors have been falling over themselves purchasing buy-to-let insurance on appropriate properties in Central London. Earlier this year rents were higher than they have ever been before and most residential landlords in the city were picking up double the average monthly UK rent for every property in their London portfolio. How things change!
Industry insiders report lots of landlords are offering extra-ordinary deals to would be tenants to avoid having an empty rental embarrassment over the festive period and experts say prices could come down as much as 20% as some landlords press the panic button. Lynn Hilton is a partner at residential specialists Coultons and has seen the market change very quickly.
She commented: “Affordability is now central to the performance of London’s rental market. Landlords cannot achieve the rents they were getting twelve months ago and must now be far more realistic with rent reductions of around 15-20 per cent in order to secure a let. Despite a small turn around in rents during the third quarter, our evidence shows that rents have begun retreating once more, highlighting the need for landlords to be realistic in their approach and expectations. Sensible landlords need to accept these reductions to minimise void periods. Greater choice across Central London is no doubt adding to tenants’ bargaining power.”
It is a surprising turnaround for the London market and landlords in the rest of the UK will hope it is not the first signs of the sector beginning to unravel. However, with the current level of mortgage lending staying as miserly as it has done for all of 2012, landlords have little reason to worry just yet.