There has been a surge in high quality tenants, including many corporate tenants working for blue chip companies, flocking to the capital in search of anything from studio apartments to substantial family homes to rent, according to JLL and W.A.Ellis.
According to the prime London letting agents, in spite of the uncertainty in recent weeks, the prime letting market is showing positivity with a healthy number of transactions being agreed for this time of year.
Lucy Morton, head of residential agency at JLL and W.A.Ellis, said: “Relocation searches increased by 50% from May to June which shows there is strong faith in the London market from blue chip companies, and that initial scaremongering about a mass exodus in the market has not slowed down the summer flow of expats coming to the UK in time for the start of the school year in September.”
However, despite the jump in demand from corporate tenants, Morton reports that there are many more properties coming to the letting market “than we would usually expect at this point in the year”, suggesting that many would-be vendors are now seeking an alternative solution in light of the slowdown in the sales market and wanting to take advantage of the strong private rented market in the capital.
Morton continued: “These clients are asking us to market for lettings either exclusively or alongside sales. Although this means there is greater supply and choice for tenants, some of our clients will still be looking to sell if, and when the market changes.”
But to enable flexibility for people thinking of potentially selling in the near term, some landlords are requesting break clauses in the tenancy agreement, which are not popular with many tenants looking to find a long term home – this is particularly relevant for the corporate and relocation market.
Morton believes it is only those landlords willing to commit to long term lets that are ultimately going to succeed with attracting and retaining corporate tenants.
“They [the most successful buy-to-let landlords in today’s prime central London rental market] offer a three year commitment; with little flexibility for a landlord to break the terms of the lease – not ideal for those wanting to return to the sales market should things change imminently.
“It is the sensibly priced properties and commercially minded landlords who are succeeding in securing tenants in this competitive market.”