Now the dust has settled I finally feel like we can share some of our feelings about how the General Election affected the lettings market this year. Although it certainly hasn’t shaken up the market, we have noticed a couple of significant shifts in the months immediately post the 2015 General Election.
The first point of note is that following the General Election we have experienced more tenants serving notice to terminate their contracts than is usual for this time of year. After speaking to these tenants the consensus is clear; tenants were nervous about what the outcome of the General Election might mean for them and waited for the results before searching for a property for sale.
We’ve found that tenants who previously rented at the higher end of the local market are doing all they can to get onto the mortgage ladder as interest rates continue to remain historically low since the General Election. There’s a clear mortgage battle in play between the market lenders too and some tenants in the area are using this opportunity to benefit from competitive rates for first time buyers with a small deposit or low loan-to-value.
I’ve mentioned in previous articles that over the last few years tenants are staying in the same rental property for longer as the private rented sector becomes the norm for many Londoners. Due to this it’s always really interesting to speak to tenants when they serve notice to understand where they are going next. Since the General Election the majority of tenants who have served notice on their West Hampstead rental property have done so because they’re searching for or found a property in the local area. With property prices at an all-time high in London, this strongly suggests that tenants like to trial an area before committing to an expensive purchase.
Although more tenants are moving on than usual for this time of year, demand still significantly outstrips supply. As usual this comes with a caveat; applicants are very sensitive to the quality of the product and even in a buoyant market properties that do not suit the taste of the searching demographic will sit empty. Considered capital investment is imperative when attracting tenants, with a further benefit being a direct correlation between a well maintained property and length of tenancy. At Paramount we’ve found that well finished and fully managed rental properties boast average tenancy lengths of 36 months.
We’ve also seen a small rise in the number of landlords who have decided to sell their buy-to-let investments this year. Landlords who have owned their rental properties for 10+ years with low gearing are leading this trend, and some have decided to look for new buy-to-let opportunities in different areas that offer more value to tenants to ensure they continue to attract young professionals.
Those looking to rent in West Hampstead will be pleased to know that we have plenty of properties coming onto the market this month. This is a great time to search for something new as the market will only get busier with applicants as the summer season progresses.
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