|Rental Prices Soar To All Time High|
London 50% above national average according to new research
London’s rental prices soar to all time high above UK average
Prices have risen by 12% from the same time last year (June 2010), and are now higher than ever before, according to new research by tenant referencing specialist, HomeLet.
The average monthly cost of a property in the Greater London area rose by 0.54% from £1,119 in May 2011 to £1,125 in June 2011, according to HomeLet, the market leading tenant referencing and specialist insurance company for the lettings industry.
Costs have been pushed up due to a greater demand for rented properties as people struggle to get onto the property ladder. It is also a result of the increase in number of people who want more flexibility in where they live - therefore deciding to rent, rather than commit to a long-term mortgage.
Chiswick was one of three areas of London that the Financial Times recently highlighted as having had the biggest growth in rental yields for residential properties over the last six months.
There has been strong demand from young professionals in the area leading to increased returns for investors with good transport links one reason for the interest. Despite Chiswick property prices reaching an all-time high so far this year according to the Land Registry figures research by property consultants Jones Lang LaSalle indicate that rents have been increasing even more rapidly. Rents across London have been on the increase recently due to a shortage of stock and the number of people unable to get on the property ladder due to high prices.
According to Jones Lang LaSalle’s quarterly review of London’s residential housing market, the average rental price across the capital is £40.20 up by 6.1% in the six months to the end of March 2011. London capital values have increased by 2.2% in the same period.
Andrew Dunford, of Winkworth in Chiswick, believes this report has got it right. “It echoes our experience accurately. Quality flats are always in demand and having fewer of them available for rent will almost always push up prices. We’ve seen rents on good flats in good roads increase by about 10 per cent over the last 12 months and it isn’t putting people off, whether they are new tenants or staying on in a flat they’ve been renting for a while. Anyone thinking of buying-to-let will not only make a good investment but also see a healthy return on that investment in the long term. And it keeps our property management team busy, too!”
Sales Price Map for West and South West London
The report states that the price per square foot of property in Chiswick is £599 with an annual rental of £30 psf giving a yield of just over 5% In Acton rent psf is measured at £23.4 with the price per square £440 giving a yield of 5.32.
In Hammersmith yields have fallen as capital values have moved up more quickly than rents with analysts saying this is due to the area moving to full 'gentrification'.
Source: Jones Lang LaSalle/Financial Times
July 28, 2011