Current state of play:
Demand may have softened since the tail end of 2022, yet the year started well, with the number of applicants registering across our PCL offices up 10% in January 2023 compared with the same month a year ago. Stock levels remain 57% below the five-year average, leading to properties being let quickly. This is particularly the case of those properties towards the lower and middle end of the market – circa £1,000 per week and under. Whilst landlords are still understandably keen to push for the dizzying rents of Q3, we are starting to see more lets agreed below asking price.
For context, JLL reported in our latest prime central London index that, the number of properties available to let at the end of Q4 2022 was 13% higher than at the same point in 2021, when stock levels bottomed out, yet remain 45% lower than in 2019.
The number of properties let by JLL PCL offices in January rose 16% on the same month in 2022. With interest rates continuing to rise, we’re generally seeing less activity from buyers and those that are buying tend to be cash buyers taking advantage of the cheaper pound. We predict that buyer demand may pick up in the summer as confidence returns but until then, it’s likely that landlords will turn to the rental market to fill a void which will result in more stock for tenants.
2023 outlook:
Following an unprecedented market in the last three years, we are now seeing signs of normality return to the market. January and February are historically quieter months of the letting’s year, and demand levels are reflective of this. However, as we move through Winter, into Spring we expect activity and momentum to re-build which will likely result in further rises in rental values later this year, especially given that the market is still going to be underpinned by low levels of stock. JLL forecast a further 6% increase in achieved rents by the end of 2023, with rents rising 20% by 2027.
Students are key market drivers during the months of August and September and last year JLL reported that applications to study in London reached their highest level in 15 years in the 2021/22 academic year, whilst international applications across London were 10% higher than they were pre-pandemic.
The first uptick in applicant demand from overseas students typically begins around 1st June when the first wave of students return to the UK after the Summer break. New students have to leave their search until the last minute as the location and price paid is typically dictated by where they will study. Returning students usually already have a strong preference over which developments and areas they want to live, with budgets often determining the proximity to the university. Two and three beds are particularly popular with second and third-year students.
Tenants living priorities:
- Outdoor space Memories of lockdown continue to influence tenants in their views regarding what they want from homes and proximity to outside space ranks high on tenants wish lists. In JLL’s latest Tenant Survey, over half (51%) of respondents placed high importance on access to shared greenspace and parks, with less than 8% seeing this attribute as less important.
- Energy Efficiency: Rising inflation and costs of living pressures continue to be a concern for both tenants and purchasers. With uncertainty over energy prices still an issue, we are experiencing tenants paying increased attention to the efficiency of their rented homes. JLL analysis of EPC data shows that homes in bands A-C will be paying on average £3,246 less per annum on their energy bills than homes in band G.
- Connectivity: Connectivity and accessibility remain important considerations for tenants. Despite most tenants working from home an average of three days per week, the distance between home and work is more important now than it has ever been.
- Amenities: More and more tenants are wanting access to onsite amenities such as a concierge, gym, and pool. Not only is this driven by convenience but also cost, having amenities accessible in your building means not having to pay/travel elsewhere which is a draw of new build properties.
Development’s meeting the needs of tenants in PCL:
The Broadway, Westminster, SW1H
https://residential.jll.co.uk/search/broadwaylettings
With five-star facilities, the state-of-the-art apartments available to rent at The Broadway are ideal for anyone looking to live in Luxury. The apartments offer views towards some of London’s most iconic landmarks including Westminster Abbey,
Buckingham Palace, The Houses of Parliament, and Big Ben. The Broadway, located on the site of the former New Scotland Yard, is set to deliver a new streetscape in the heart of Westminster that is known as Orchard Place. Designed by architects
Squire & Partners and developed by Northacre, this stunning development is now offering 2-bedroom apartments to rent exclusively through our specialist team.
2-bedroom apartments start from £1650 per week
Buckingham Green, Westminster, SW1E
https://residential.jll.co.uk/buckinghamgreen
Buckingham Green fuses residential, retail and public space to offer residents the perfect living location in central London. Residents have St James’ Park, one of the capital’s favourite luxurious green spaces right on their doorstep as well
as the river Thames only a short walk away. Residents can also unwind locally at the retail and entertainment hotspot in Victoria or catch the transport straight in the city as well as direct tube links to Knightsbridge and Sloane Street.
2-bedroom apartments start from £1625 per week.
Thames City, Nine Elms, SW8
https://residential.jll.co.uk/thamescity
Thames City is a new landmark on London’s skyline and a new standard in luxury living. Tenants will have the use of exceptional amenities, including a 30m swimming pool, and services at their fingertips, in beautifully designed apartments with spectacular
views over the city.
These contemporary apartments have been thoughtfully designed to maximise the use of space and offers unrivalled views. They are spacious and bright, with floor to ceiling windows flooded with light. The kitchens and bathrooms have been finished to the
highest standards and the style is refined throughout making the apartment a welcome retreat at the end of the day. Multiple amenity spaces have been designed to calm and inspire include an elegant lobby with a 24-hour concierge, a wellness centre
that includes a 30 meter swimming pool, spa, sauna, treatment rooms, a fully-equipped gym, a private cinema room, a library, private dining, lounge area, library, a sky lounge, karaoke room and kids club.
Located close to the river Thames and a few minutes from Nine Elms Underground station and Vauxhall transport hub means getting around the city couldn't be simpler. The Thames Clipper service is also nearby.
2-bedroom apartments start from £1000 per week
