So we are told things are 'on the up', but I'm not sure if that represents good news. If you read the tabloids we are certainly lead to believe that unemployment, gang related crime, City banker's bonuses, inflation, and of course, most importantly, reality TV shows are all very much 'on the up'.
What about the good news? It can't all be doom and gloom, someone (except the bankers) must be starting to see the light at the end of the tunnel. Well we are pleased to report that there is some good news out there, if you own a property in London, then in general we are told that you should be happy with the way the economy is working itself out.
As the rest of the country comes to terms with the fall out of the recession, and what it means for property values, the capital is experiencing increased asking prices that show no sign of slowing. Rightmove reported asking prices in the capital rising by 5.2% since only September, the biggest climb since October 2009.
Demand in London is also on the up, specifically from cash-rich buyers and international investors. Those with the funding are taking advantage of the fantastic value mortgage rates currently available. Of course there is another side of the coin to consider, and that is those who do not have the funding or deposit to acquire that oh so important mortgage agreement. These would be buyers are now flooding the rental market. Although there is clear evidence that sales prices in the capital are up, the level of purchases from landlords simply isn't keeping up with demand.
Record rentals are being recorded throughout the country, but especially in London where demand continues to rise. Specifically, we are noticing overseas corporate clients returning to the capital and relocating their staff. As well as these larger clients, the traditional first time buyer has become the bread and butter of the lettings market, making up a huge proportion of tenants in rented property. Typically we are talking about a couple aged somewhere in their mid 20's to mid 40's, both with good incomes, and wanting to be within half an hour of Central London, but like the idea of being in the one of London's popular suburbs, such as Chiswick or Ealing.
All this looks like great news if you are a landlord who owns property in London; rental prices are being pushed up by increased demand, the quality of tenants available to you is great, and it would appear as though your investment is maturing nicely. All this good news can lead people to behave in a very cavalier manner, and Thorgills would like to advise that you err on the side of caution. A record rental is only attractive if it is sustainable, and a long term tenant paying their rent every month and looking after your largest asset is a very precious tenant indeed.
Thorgills have so far this year experienced record rental increases year on year, regular lets occurring with 24 hours of instruction, a dramatic increase in company lets and record levels of renewals and contract extensions. Whilst this is all good news for both Thorgills and our landlord clients, we are always quick to advise that whilst there may be potential for achieving that slightly higher rent at the moment, does this approach offer you the long term security all landlords desire.
In these uncertain times we would advise speaking to Thorgills before making any decisions on your rental investment. Please remember we are voluntary members of both the National Landlords Association and the Property Ombudsman, so our work is always carried out to the highest standards. Thorgills advice and valuations are free so please do not hesitate to get in touch.