Paul Hogarth on property

As I am writing this, thousands of landlords across the country are rubbing their hands with glee as the average rent in the private sector has shot up to reach a record level of nearly £700 per month.

The situation in London is, as always, more extreme than the rest of the country: there have been reports of 30% and 45% rental increases in some areas of the capital this year alone and the competition has been so overwhelming that landlords of some of the best rental properties have asked prospective tenants to submit sealed bids!

Wembley certainly hasn’t been left behind and our Wembley City lettings team have reported that some of our landlord clients are now enjoying gross yields of 6 or 7%, compared to the 4% they were getting just two years ago.

So why are landlords suddenly making all this money when not so long ago all you heard about was the number of buy-to-let investors who were losing money and having to sell their investments at rock-bottom prices? Well the simple answer is an overwhelming demand for property in the capital. In a recent survey by Spareroom.co.uk it was suggested that a staggering seven people were chasing every room for rent.

The main reason for this explosion of demand is that generally, house prices in London have recovered to their 2007 levels, meaning that they are once again out of reach for the majority of first time buyers. Unable to buy, these would-be buyers are being forced to rent for longer and are therefore boosting demand, particularly for stylish modern homes with good facilities like we have at Wembley City.

Another factor driving the rental market is the relative strength and stability of the London economy: not only are more jobs are being created in London than elsewhere in the UK, but the capital is also the most protected from the public sector cuts and has the most to gain from the emerging markets and economies such as China, Russia and South America.

With fantastic transport links into central London, exciting regeneration plans that are already well underway and average prices and rents lower than the London average, Wembley is attracting growing numbers of investors looking to capitalise on the current rental situation. It is also drawing in those renters looking for an affordable rental property while they save for their deposits, and Wembley City has emerged as one of the favourite destinations.

Offering some of Wembley’s newest and highest quality apartments, the development stands out from the local competition because today’s young renters are looking for cool modern properties that feature all the latest mod-cons such as integrated appliances and wall-mounted flatscreen TVs – not the tired-looking 1930s semis that make up the majority of the rental stock in Wembley. There has even been more than one instance where tenants have been so impressed with their new home that they are going on to purchase their flat or another one within the development.

The strong rental market has really helped boost sales at Wembley City as investors take notice of the strong yields and low void periods and are attracted by the low-maintenance / low effort nature of new build apartments. We are even offering a customer care package that sees all fixtures, fittings and appliances guaranteed for two years so no fear of any unexpected bills!

This all goes to show that there is still plenty of life left in the property market and, although the market is notoriously difficult to predict, I will guarantee you that 2011 will be an interesting year for us all, no matter what our connection to property is – developer, purchaser renter or investor.

For more information, visit wembleycity.co.uk.