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TODAY'S OTHER NEWS

High demand for rental property sees viewings hit a 10-year high

Viewing figures in the letting market in London and the Home Counties hit a 10-year high at the end of August, according to new research by Knight Frank.

According to the property firm, many prospective tenants have been taking advantage of falling rents, with many seeking more outdoor space. 

The cause of weaker rental values has been a strong supply of properties as owners opted not to sell during the pandemic, exacerbated by the addition onto the market of many short-term lets.

In the 12 months to July, average rental values in prime central London declined 5.8%, while in prime outer London the decrease was 5.4%. 

In such a tenant’s market, more viewings are typically undertaken before a let is agreed, which will also have helped push the figure to a 10-year high.

But the number of tenancies started suggests there is more happening than high numbers of viewings. 

For most of the summer, the number of tenancies was about a third below the level seen last year. In the week ending 22 August, the figure was 17% higher, suggesting downwards pressure on rental values may start to weaken.

Tom Bill, head of residential research at Knight Frank, said: “Part of the explanation is the unusual seasonal pattern of activity in 2020. Students account for almost a quarter of the market and uncertainty around the start of the new academic year meant July was quieter than normal.”

He added: “It is also true that London will remain an attractive destination for overseas students irrespective of how long it takes for Universities to return to more normal conditions. Demand is strong in the capital due to cultural as well as academic reasons and many students have worked for years with the specific aim of a place at a London university.

“Should flight schedules around the world continue their return to normality, this will support demand in the normally quieter final quarter of the year and could lead to a few more seasonal records being broken.”

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    Well well well. So who do we believe now our resident doom monger or Knight Frank.
    Unless the area has been nuked a property always has a rental figure and can be let even in a pandemic it seems.

    Paul Barrett

    The end of furloughing wil see a significant impact on the PRS.
    Many LL may have little alternative than to accept lower HB rents from existing tenants.

    Whether LL can survive on HB rents is of course another matter!

    These are uncharted times and I doubt anyone really knows what will happen when millions are made redundant.

    I think all these changes has certainly changed the LL appetite for risk.

    Reducing portfolio size and reducing leverage will I consider become more prevalent as LL realise the risks they are running with feckless tenants.

    Not being able to get rid of feckless tenants is a massive pressure on the BTL business model.

    The same income is definitely achievable from fewer and less leveraged properties.

    I know if I was starting out again with my original pot of money I would have only bought 2 properties and possibly only one.
    LL financial resilience is key here.
    It is pretty pointless investing to the point where feckless rent defaulting tenants could bankrupt you.

    I believe this CV19 issue will change the mindset of existing and future LL.

    It should result in many more LL becoming far more financially resilient than they have been to date.

     
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