WEST END, CITY AND DOCKLANDS PREDICTIONS FOR RESIDENTIAL LETTINGS IN 2010

Hurford Salvi Carr have released their predictions for residential lettings in 2010.

Kari Trajer, Associate Director at Hurford Salvi Carr comments “Over the first half of last year, Tenants enjoyed a wide choice of properties to rent throughout the capital, however rents have now stopped falling as the supply from accidental Landlords has tailed off. Hurford Salvi Carr’s four London offices saw a strong increase in tenancies renewing during 2009. The increase was from Tenants unable to secure finance to purchase a property of their own, and with rents stabilising, this prevented those Tenants from making a move elsewhere to gain a price advantage.

The prospects for the rental market in 2010 will be strongly influenced by the strength of the employment market in central London, the supply of rental stock coming from developers, investment and accidental Landlords and the inability of Tenants to get onto the housing ladder. With mortgage lending criteria unlikely to improve in the first half of 2010, properties for sale are likely to remain beyond the reach of first time buyers. As a result, Hurford Salvi Carr anticipate a repeat of the high rates of tenancy renewals seen in 2009 as prices stabilise or rise and tenants continue seek to avoid unnecessary relocation costs and higher rents.

In Hurford Salvi Carr’s view, rent levels are likely to remain unchanged in the first half of 2010, with the Election also being a factor, albeit not as strongly as in the sales market. In the second half of 2010, however, the demand for rental accommodation historically reaches a peak in the Summer and Autumn months. This will have the effect of an increase of rents of around 5% by the year end.

Kari Trajer, continues “Looking beyond 2010, one of the biggest influences on the rental market will be the eventual return of mortgage lending on reasonable terms. When this happens there will be significant pent-up demand from “reluctant Tenants” within the sales market and this will evidently reduce the demand for rental stock. However, when the mortgage market opens up again, a certain percentage of properties which are currently in the rental market are anticipated to be put up for sale in a rising market and this may have the effect preventing an excessive imbalance of supply over demand, which will keep the rents stable for the medium term”.

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