Despite the high levels of stock, Hamptons residential lettings statistics show that confidence amongst landlords remains high, with over 48% seeing the lettings market as method for increasing income and 22% as a part of a long-term investment plan. However their data also reveals that one-in-ten landlords are letting because they had not been able to sell.

Headline pointers:

• Fewer Tenants, More Properties: Prospective Tenants are still down by a quarter over this time last year while rental stock is 50% higher.
• Signs of Improving Demand: Lets up by a quarter, re-lets 50% higher and viewings up 3%.
• Withdrawals Up: More Landlords opt for the buoyant sales market, as rising mortgages place increased pressure on yields
• But Landlord Confidence Remains High: Statistics show that nearly 50% see the lettings market as means for increasing income and 22% as a long-term investment plan.
• Couldn’t Sell? Hamptons data reveals that one-in-ten landlords are letting because they were not able to sell.
• “Re-education Required”: Both for Tenants and Landlords returning to the lettings market after a period away.
• Corporates Up: Corporates and Relocators continue to return in force in both London and Country regions.
• Investing in Education: Hamptons highlight a trend in which parents are purchasing student properties both as an investment and to avoid paying rent while their children are at university.

It has been a difficult time for landlords says Hamptons. With the traditional New Year surge supply of rental stock again on the increase, now 52% higher than this time last year and up 7% up on last month (8.5% higher in London), the lettings market continues to be firmly in the tenants’ control.

In this challenging climate Landlords should seek advice from their Lettings Agents about the correct marketing of their properties and expected rental levels, as there is frequently a difference between reality and expectation:

The company highlights an interesting trend amongst parents, who are increasingly purchasing student properties in Oxford to avoid rental payments while their children are at university. They feel this gives them both reasonable returns on their investment and long term capital growth.

Demand

Despite the challenging market, the number of lets is up by a quarter on February 2003, and the number of re-lets is 50% higher. However, transactions are requiring more management than usual.

Negotiating tenancies and processing offers appears to be more fragile than normal. Managers report that transactions are more vulnerable to fall through and it is taking longer to get things agreed.

Prospective Tenants have also increased since January but, keeping this in perspective, they are still down by a quarter over this time last year (while rental stock is 50% higher). Nonetheless, they are certainly active: Hamptons report a 3% increase in the number of viewings overall, particularly in the country (up 11%).

Once again, the corporate market has gone from strength to strength, with many companies looking to relocate both in London and the Country.

The Short Let market continues to thrive as it becomes an increasingly attractive option to Tenants, notably those between their house moves, and as a cheaper alternative to hotel accommodation.

Where are Tenants looking in London?
Source: Hamptons International Demand Index, London, January 2004