The rental market for June has shone a light of hope for property inside and outside London. The market is primarily being driven by those with secure finances, who are able to act on the desire for a home that is either better value for money or affords the lifestyle that has been carved out in the wake of the recent restrictions.
Our experience has been, the further the property is from central London, the more rents seem to be holding their own. While many landlords, who are in a position to help their tenants with rent reductions or rent holidays, they are still able to attract the same or even more rent for their property, depending on their where they are located. Tenants seeking better value for money, seem to be giving a boost to property areas in Zone 3 to 6.
While much of this is financially driven, a change in lifestyle against location seem to be at the heart of the decision to move. Working from home and wanting outside space, are logically the most desirable aspects for tenants at the moment.
The demand for rental stock reached record levels for June, according to the latest ARLA Propertymark Private Rented Sector report. However, the overall number of new tenants registering is still down against pre-lock down figures.
Meanwhile, Zoopla reports an increase in prices and takes a closer look at the effects of the current supply and demand on the property market.
The latest Nationwide house price index for July also reports that prices are on the up. There has been a general 1.7% month-on-month, helping to reverse the damage done by the lock down measures.
While levels of mortgage approvals remain significantly lower than they were prior to the pandemic, these are now firmly on the rise. However many providers withdrew a substantial number of products at the beginning of lock down measures and as a consequence the lack of choice this has put added time pressure onto the process of applications.
With the prime rental market, there has been an increasing amount of short term stock available but the London market is still under pressure.
Outside of London, prime rents across the commuter belt continue to increase as a result of strong demand for family housing. Many people are reconsidering what they want from a home, with some deciding to relocate and rent before committing to a purchase.
However, the future of what happens next, will depend on how quickly the short-let stock in London moves through the market, and whether the current levels of tenant demand are sustained.
Recent data on house prices, mortgages and lettings prove the market to be more robust than expected, but we should not read too much into one month’s figures, particularly given the prevailing economic uncertainty.
The latest statistics on tax revenue from property transactions across the UK show a year-on-year reduction of 44% during the second quarter of 2020, resulting from a similar drop in transaction numbers as reported by HMRC. A number of studies show, the tax relief measures implemented across the country mean that property buyers in the UK now pay among the lowest in tax in Europe.
In context to this, the London market now appears good value, historically and it is expected to bounce back. This is partly due to Stamp Duty savings, as reported in the Sunday Times, which shows London buyers to be benefiting the most.