Is the lettings market cooling down?
Landlords have been used to an easy market since the end of 2021, experiencing quick lets at peak prices. As we enter the winter, is this now changing in central London? Read more to find out…
Since 2021, the market has been unstoppable. With low supply and high demand, this brought with it huge price increases, seeing an increase between 12-16% each year. Landlords were receiving multiple offers on their properties after only having them on the market for 24-48 hours. In some cases, landlords were receiving 25% over the asking price in locations where there was huge competition.
The summer of 2023 was very much the same, although demand seemed to slow slightly, the lack of housing across central London, allowed landlords to continue to command higher rents and still receive multiple offers.
In the last month, as a leading agent in central London and remaining No1 for let agreed properties out of 82 agents on Rightmove, we have seen the slowing down with regards to demand. With some tenants finding the competition to hard, so deciding to remain in their current properties. Other applicants have simply been priced out of the central London market and unable to afford a property in the centre of London. It was reported in a recent survey, that many were having to resort to the bank of Mum and Dad to rent their property and 22% of the tenants were not able to find a property in their desired location in time, so opted for an alternative location.
During October, in Bloomsbury alone (according to Zoopla monthly market Data); 212 new instructions were added, 65 properties were let and 139 properties were reduced.
During September, the data showed there were 323 new instructions, 177 were let and 91 reduced.
Agents who have taken their eye off the market trends are still valuing properties at peak prices, which has now caused a mass increase of price reductions in the last week. Yet we are still seeing/hearing this happen every day.
Understandably with mortgage rates, landlords are wanting to keep the prices at their peak, however when calculating the loss of rent in potential void periods due to the tactic, it amounts to more loss than gain.
Properties which are even typically popular and ‘easy to let’ are now sticking on the market for longer than they have been in the past 24 months.
Beat the curve and the competition and price your property more realistically, if you wait for the others to do this and follow suit, you will be met with further competition in the market.
Alternatively, if you believe your property is priced correctly, has your current agent become complacent with an ‘easy’ market and need to change their tactics?
If you would like a fresh valuation or approach on your property, contact us today on 0207 734 4062.
We look forward to hearing from you.
Residential Lettings Director