To grasp how the lettings market will react in 2017, it is best to look at the wider economic effects and political changes brought in by the UK government in 2016.
Whilst the number of properties coming to the market was at an all-time high, conversely, rents did not increase as in previous years. Principally it was buy-to-let portfolio landlords attempting to beat the 3% stamp duty deadline so a swathe of new-build SE1 property hit the shelves post April 1st 2016.
Wage increases were also sluggish in comparison to the sharp rise in the cost of living, directly affecting rent affordability. High rents and lower wages did not equal properties going under offer, which in turn created a saturated market. Landlords had to adjust to the stabilising market to ensure they avoided costly void periods.
However, it was not all doom and gloom! The market did settle in the second half of the year and activity levels picked up, further highlighting the resilience of central London, particularly in the traditional heart of Southwark and Lambeth boroughs.
Despite all the negative press in the last few months and the on-going political crises surrounding the UK’s property market, trends indicate that rents will continue to remain strong. According to Savills 2017 forecasts, rental growth is predicted to outstrip sales growth.
This can be attributed to the struggle of the ever-increasing cost to first-time buyers. Consequently, stock levels are predicted to remain high, with fresh instructions appearing daily in the ever-popular Waterloo & Bankside areas.
However too many properties are being brought to market at over-inflated prices by estate agents, eager for an instruction. This bullish approach, fundamentally, costs the landlord money by having a property vacant for numerous weeks.
To achieve quick and effective results, we recommend pricing a property at the true, current, market price; this will ensure landlords secure a tenant fast, minimising losses by avoiding unnecessary void periods.