LONDON, April 12, 2011 /PRNewswire/ -- One of London's leading lettings experts says the Capital's residential lettings market continues to soar, prompting a severe shortage of properties for prospective tenants.
"Summer has come early to London in every sense - the sun is out and the rental market is ultra-hot thanks to a unique combination of four factors," explains Anita Mehra, Managing Director of Benham and Reeves Residential Lettings.
"Firstly, property remains very attractive to overseas investors because of the exchange rate, which makes many homes effectively 20 per cent cheaper now than in 2006," says Anita, who has just returned from several property exhibitions in Hong Kong, Singapore and Kuala Lumpur.
"Secondly, the City - on which much of the Capital's prime rental market depends - is in good health. Experian, a business consultancy, predicts London's financial and business services sector will grow 2.8% per annum over the next five years," she says. The result is that many overseas financial services experts are coming to the UK for short periods and become the professional tenants who so many landlords want to attract.
Thirdly, there are growing numbers of international students in London - there are now 285,000, some 25% more than just two years ago, and academic experts say there will be a predicted 47,000 student-bed shortfall by 2016 as the number of incomers grows well beyond the construction of purpose-built accommodation.
Finally, falling levels of new house-building and continued mortgage restrictions, especially for first time and young professional buyers, mean the demand for London homes – to buy and to rent – look likely to outstrip supply for many years to come.
"The result is that investors from around the world are interested in buying in London, and we simply cannot find enough stock to satisfy our rental demand. At the Asian exhibitions I recently attended there was particular interest and talk about keynote developments like Pan Peninsula and The Landmark in Canary Wharf and The Marconi building in The Strand. Most investors are buying smaller units such as studios and one-beds because of market demand," explains Anita.
"This is the time for investors to buy and let out. Relatively high entry prices for individual properties should not be regarded as a barrier to investment," says Anita.
Smaller units are popular with investors because they are highly affordable, and are very popular with tenants because they are less expensive - despite rents having risen 10% or more in the past year. Many corporate and overseas student tenants are particularly keen on smaller, easy-to-manage units.
Demand is so strong that Benham & Reeves Residential Lettings has many clients who have bought keenly-priced apartments on the fringes of central London, as well as in prime areas, and letting at premium rental levels within a week of purchase.
Anita says: "But the critical factor is that this is not just a market producing short term gains on rental income. It also promises long term capital appreciation; property consultancies like Savills predict much of central London will see 33% increases in value by 2016."
As an independent lettings agent, Benham & Reeves is uniquely well-placed to assist international investors. The company has offices in Hong Kong, Singapore, Dubai and Mumbai and key members of the firm frequently visit to meet prospective investors.
There is also a complete property management service, handling not only purchase and rental but also tenant- and facilities-management and offering assistance on preparing and refurbishing apartments to optimise rental income.
Anita Mehra says: "This is the time to invest before exchange rates swing away from overseas buyers or capital values rise too steeply. London is red hot just now."
Tel: 020 7433 6675
Established in 1956 in Hampstead, London, and now with 9 offices in the prime residential areas of London, (and overseas offices in Singapore, Hong Kong, Dubai, Delhi and Mumbai), Benham and Reeves Residential Lettings is recognised as one of London's largest, specialist lettings and property management agencies. To complement this, they also provide an interior design, refurbishment and furnishings service for London rental investment properties to landlords based worldwide.
SOURCE Benham and Reeves Residential Lettings