The rental sector of real estate in London continues to grow

The rental sector of real estate in Central London is gaining momentum. Over the last ten years the number of people living in the private rental sector increased by 16.2%.

There has also been a decrease in the total number of new housing coming onto the private market – the number of new apartments decreased by 14% and the number of new homes fell by 27%. It should be noted that the stronger a distinct lack of housing in the cheaper sector of the market of rent of elite real estate at below £750 per week – in this sector the number of new housing on the rental market decreased by 19% since March 2014. In the more expensive market segment, where prices per week from £2,000 per week, the number of new objects for lease decreased by 10.2%.

Statistics on rent for Q2 2014 shows that the second quarter saw a significant turnaround in demand for luxury property to rent, reflecting the improved economic performance in London. The most competitive of the family home in London. Since the beginning of 2014 has leased 12% more family homes than in the same period of 2013.

Houses and apartments designed for large families and is located in the largest deficit. The shortage of family homes in conditions of tough competition is forcing tenants to pay more. So, renting a house costs to families is 13.8% more than in the apartment with the same number of rooms. And in Kensington and Chelsea the difference in price is almost 25%.

The rental market of London is very subject to seasonality. For the period from July to October is about 51% of all transactions to date real estate for rent.

In sector of elite real estate of London in 2013 and 2014, there is high level of sales by investors fixing profit from rising real estate prices. And no wonder, because the rise in prices over the period from 2010 to 2014 was 47%. Rental yield is very small and varies in the range of 2% -3%. This is not a circumstance that stops investors, they think that now, when the market slightly lowered the growth rates, it’s time to invest in those objects that are scarce and which in any case will be in demand because of the imbalance of supply and demand.

For investors, always a barometer of the real estate market was the growth of the employment market. The UK economy, and the greater part of London is recovering faster than analysts predicted. Thus London confirms its “status quo” as the city attractive for investment.

® Alice Morgan. 18.07.2014 g.

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