Lettings: Summer Update

Date Published 31 August 2022

The end of Q2 2022 has seen a continuation of the rental machine in Central London. With stock levels being low (albeit slightly improved from Q1) and high demand from applicants, Tenant's frustration can be seen as they feel their only option is to pay over the asking prices in order to secure a property. This has resulted in Chelsea and Knightsbridge seeing average house rental values soar in the last 3 months with an increase from £1,620.00 per week to £2,664.00 per week and £2,741.00 per week to £4,316.00 per week respectively.

The last 3 months have also experienced a dramatic increase in transactional volumes. Quarter 1 of 2022 was still feeling the effects of the Christmas period and the consequences of Covid. Therefore, transactional activity was 19.7% down in Knightsbridge and 11.2% down in Chelsea. Quarter 2 has seen a shift in the opposite direction (a 4.9% increase in Knightsbridge and a 6.4% increase in Chelsea) demonstrating a return of Tenants to Prime Central London as employees are required to be in the office more often.*

As the Department for Levelling Up, Housing and Communities (DLUHC) presses ahead with their plans to 'reinvent the Private Rental Sector' more information is becoming available.

In order to protect Tenants, the Government are outlawing fixed term Tenancies and replacing them with indefinite Tenancies. This would allow any Tenant to serve 2 months' notice at any time in order to terminate their tenancy and, with Section 21 notices also being axed, this would see Landlords only being able to serve notice to a Tenant (after a minimum term of 6 months) should they require the property back to sell or if they (or a family member) wish to move in themselves. Landlord's will be required to sign up to a landlord's register allowing local authorities to monitor and enforce those that flout this new law.

This is a dramatic shake up to the Private Rental Sector and, if this goes into effect, it will most certainly reduce the number of properties available within the PRS. This would consequently place huge pressure on local authorities to source alternative housing within an already struggling industry. Plans to abolish Section 21's and make it more difficult for Landlord's to remove their Tenants creates an uncertainty within the market and the damage and impact this would have across the country cannot be underestimated.

* Data obtained from Lonres

For any more information please do call us on 0207 589 3353 or email Clem Byron Evans clem@ashdownmarks.co.uk