Welcome to the quarterly Kensington & Chelsea lettings market report for Q1 2018.
This report covers January to March 2018 for the Notting Hill, Kensington, North Kensington and Kensal Rise areas of London. (NW10, NW6, SW1, SW10, SW3, SW5, SW7, W10, W11)
Overview – Kensington & Chelsea rental market
The lettings market has been a mixed bag so far this year. January was very busy with those who had obviously put their search on hold over the festive season. Also, many landlords reduced their asking rents in the New Year & this resulted in a lot of the stock that had been struggling on the market before Christmas finally letting. February was quieter, probably due to ‘school dependent’ half term falling over 3 different weeks and then the ‘Beast from the East’ which took us all by surprise. Things picked back up again by March and many new tenancies were agreed.
- -3.0% three month change in achieved price (down from 1.1% last quarter)
- -3.7% three month change in in transaction volume (down from 35.9% last quarter)
- £37 average achieved £ per square foot per annum for a 2-bed flat (down from £41 last quarter)
- 6.6% average discount on initial asking price (down from 6.9% last quarter)
- -25.6% annual change in the number of available properties (up from -27.9% last quarter)
- Rental values averaged £623 per week for flats (down from £646 last quarter) and £1,615 per week for houses over the last 3 months (up from £1,404 last quarter).
- Properties let over the last 3 months achieved an average of £40.49 per square foot per annum in rent, down from £41.56 at the same time last year.
- The number of properties let over the last 3 months was down 14.3% versus the same period last year and down 3.7% from 3 months ago.
- Achieved rental values fell by 2.6% compared with the same period last year and 3% versus 3 months ago.
- 77 average number of days current inventory has been available (compared with 92 last quarter)
- 33.9% of properties available have been reduced in price (compared with 37.4% last quarter)
- 12.4% percentage of properties currently under offer (compared with 11.9% last quarter)
- 74.5% of properties have an asking price of less than £1,000 per week, up from 71.5 % from the same time last year
- 7.8% of properties have asking prices of more than £2,000 per week (down from 8.9% last quarter)
- 33.7% of flats (down from 36.7% last quarter) and 41.6% (down from 41.6% last quarter) of houses currently available have seen a reduction in asking rents since they were first put on the market.
In the first quarter of 2018, we’ve found the upper end of the market is where things have really suffered. Budgets have been cut across the board and the the corporate relocation agents have much less to work with. Landlords have had to respond accordingly. Tenants are shopping around a great deal. They are looking in much wider geographic areas before making decisions. But we are certainly still finding that properties that are in good condition and priced realistically are letting.
Asking prices have to be reviewed regularly and it is a tricky balance of pricing properties realistically to encourage viewings but high enough to allow room for negotiation. The vast majority of applicants will offer below the asking price. Properties that are priced a little too optimistically will struggle. We have seen that adjusting the price to just the right level can then encourage, in some cases, multiple offers.
With summer around the corner, we expect demand for family houses to increase. There is a lack of quality family houses on the market at the moment, so as demand increases prices should do the same.
Year on year, the market has strengthened but is still down on pre-referendum values. Now more than ever is the time to listen to the advice of your local agent. And also listen to how the market is reacting to your property and respond appropriately.
If you’re thinking of letting or renting property in Notting Hill, Kensington, North Kensington and the surrounding areas, ensure you get expert advice. Contact our Letting Directors today to book your free consultation.
All data used in this report was gathered from Lonres.