An expansion of services
However, it isn’t simply a matter of landlords contacting letting agencies in Canary Wharf and instructing them to find good quality tenants. Agencies now have to offer a wider range of management services too. This is primarily because many of the investors buying up properties to let are overseas investors, and therefore need a representative in the UK to look after their interests.
Good for tenants
This works in the tenant’s favour, as it means they will be getting more out of their tenancy. Rather than a straightforward rental, managed property means that tenants have an immediate point of contact if an issue arises – from a leaky pipe to a question over rent payments. It also means that they know that they are paying a fair rent for their property, as agents now insist on a proper rental valuation before an agreed rent is set.
Good for landlords
For landlords, stricter policies on background and reference checks as well as complete credit checks of potential tenants protects their investment and reduces the amount of time properties sit empty. This marks a shift in the role of agents in the rental process in that it is not merely about matching tenants and landlords now, but they are expected to perform a more comprehensive management role throughout the entire length of the tenancy. As a result, letting agents in Canary Wharf and other prime locations around the capital may have to take a fresh look at their business model, and how they sell their services to both landlords and potential tenants.
Surge in demand for longer tenancies
Short-term tenancies are on the decline, as both landlords and tenants look for more permanent relationships. So while six-month short-term lets are still popular, it’s the longer 12 or even 18-month contracts that are attracting London’s young professionals. Thanks to a more settled and robust economy they are feeling a little more confident about ‘staying put’ for longer periods, meaning that more long-term contracts are being negotiated at the point of offer.
The election was a gamechanger and thanks to a more stable market, the removal of the threat of a ‘mansion tax’ on properties over £2million and a raft of positive financial news in the weeks since May 7th, the rental market has seen a burst of activity which could go on for some time. But the key driving factor is demand, which has jumped over the last few months. Agents are reporting up to a 69% increase in the number of email queries they’re receiving, and tenants are also demonstrating an increasing level of sophistication when it comes to hunting down that desirable apartment in a prime location.
They’re also tending to pay deposits over the phone to stop being gazumped by other potential tenants, demonstrating just how intense demand is for the top level of prime rental property in Canary Wharf and other areas of East London in particular.
In Greater London the average rent for a two-bedroom property is currently £2,216 per month, an increase of more than 6% in the past year from £2,086. It also demonstrates a continuing increase from previous rises, for example the 3.7% increase from 2012-13.
A highly competitive market
Once again, demand is keeping pace with supply and, in some instances, outstripping it. In short, the rental market in London and in the Canary Wharf area in particular is becoming highly competitive. Premium quality rental properties – particularly smaller studio apartments and one-bedroom apartments – are renting almost instantly. This means that as rental property in E14 and Canary Wharf starts to dwindle, attention will shift towards previously less desirable areas such as E16.
Expect to see this part of East London go through a surge of interest as a desirable rental area for tenants and as an investment and development opportunity for landlords in the future.
|All figures and quotes are accurate at the time of publishing|