It’s been one of those times in the property market.
The last 18 months or so have seen the market in Hammersmith (as well as the rest of London) fall and rise with lockdowns and the changes to the way we live major factors in this. And now we are seeing a shortage in available rental property have an effect on the rental market. London rents are up 15% from this time last year, and we are seeing a similar trend in Hammersmith rental properties too.
When the pandemic hit, people moved out of the big cities of the UK and the rest of the world. Cities were seen as places where the risk of infection was high. In addition, when people were working from home, they didn’t need to be near their place of work. But the trend is for people to go ‘back to the office,’ and thus back to the city. Demand is high. We are seeing registered tenants (those that are looking for a place) increase by over 30% here in Hammersmith. And that means there are so many more people after each and every Hammersmith rental property available.
Add this to the fact that the stock of rental properties is lower and we have something that GCSE Economics teachers talk about all the time with their demand and supply graphs. Simply, when demand increases and supply falls, there is only one potential outcome – prices go up.
People now don’t have the same choice that was once there. Whereas renters were able to view a handful of properties and make a choice only a couple of years ago, they now need to act quickly to avoid missing out. Stories of people offering 6 or 12 months rent upfront or offering over the advertised price are now commonplace.
It is a good time to be a landlord in many ways, that’s for sure. But the flip side of this is the tenant that is fighting to secure a place to live.
What Does The Future Look Like?
This is a great question. Although there isn’t a crystal ball that can predict exactly what will happen in any housing market, there are some factors at play here that will affect the Hammersmith rental property market in the next 6 months to a year, including –
• The potential of interest rate rises
• A possible next wave of the pandemic
• More people coming back to the city of London
• The impact of the end of the furlough scheme
Now, let’s take a look at this one by one to see how they will change the Hammersmith rental property market in the short term.
Interest rate rises are usually seen as something that will affect the home buying market. But this has a knock-on effect on the rental market too. If fewer people are able to afford a mortgage, then more will turn to rent as an alternative. Lower levels of confidence in property ownership can mean higher levels of confidence in renting instead.
The pandemic hasn’t been put to bed yet. Although our vaccination system has been one of the most effective in the world, we are stills seeing new infection levels in the tens of thousands per day at the time of writing this article. Add this to the pressure the NHS typically feels in the winter months and it’s hard to predict where we might be in terms of future lockdowns and other restrictions. Will this change the way we live again? Current evidence suggests that if we do change, it will only be temporary.
London is a magnet for people.
Investment levels remain high in the capital right across the different suburbs. And this suggests that demand will stay high in the upcoming months. Strong demand is at the core of the current rise in Hammersmith rental property prices, as well as that of the rest of the capital. And that demand may continue to rise as the end of furlough hits us. The effects of this are yet to be seen fully, but now businesses are letting people go, the job market has a direct link to the rental property market. Fortunately, there are many job vacancies at the moment, as employers are looking for quality candidates across the country. Definitely, one to keep an eye on.
Written by John Rigg
Source London Estates
