Although prime central London rents have risen 16% since their recessionary low in June 2009, they are still 7% below the peak level they reached in March 2008, when the London economy and employment market were yet to feel the effects of the credit crunch and job losses in The City.
Looking back further, we see that rents in central London have performed modestly over the past decade when compared with capital values. While average earnings in central London rose 42% in the ten years to the end of September 2010, average rents only rose 13.5% over the same period, a fact which ought to give landlords confidence regarding the sustainability of the market.
The volume of properties available to rent is still lower than it has been historically. The number of newly-available properties fell by 6% year-on-year in September 2010, and by a massive 36% compared to September 2008. This was when the lettings market faced its most turbulent period, with a huge oversupply of properties resulting from the wave of ‘forced landlords’, which in turn forced down rents during the recession.
Demand for rental property has been very strong, with new applicant volumes between May and August running at around 10% above the levels seen in either 2009 or 2008. September saw this level decline, with new applicant volumes falling back noticeably by 14% compared to the level in September last year. The same was true of viewing figures, which again fell back in September after strong results throughout the summer period.
Countrywide saw more than 19,700 new tenants registering for rental accommodation. This now represents a 44% year to date increase. Countrywide further mentioned that during the same period, the number of new rental properties coming to the market only increased by 1%.
One of London’s latest investment opportunities, This Space, is a 21st century refurbishment of one of London’s iconic 1960s modernist structures, located just 14 minutes from the City of London. Due to its close proximity to the city of London, this off plan development is expected to generate strong capital growth and rental demand. This Space is located in the extensive regeneration area of Nine Elms. With the plans for a new tube station and the redevelopment of Covent Garden Market, This Space is a prime investment opportunity to those wanting to gain a foothold in the UK property market.
Watch a video from Wandsworth Couincil describing the regeneration project for Battersea Power Station and the Nine Elms area.
This Space sits on the border of Nine Elms, London’s last stretch of undeveloped riverside space, and the last large scale opportunity to create a thriving new neighbourhood on the bank of the Thames. With plans for a new tube station in the offing and the redevelopment of New Covent Garden Market underway, developers are zeroing in on the remaining sites in SW8. As one of the first developments to reach the market, This Space looks set to reap the benefit of local regeneration.