Aston Chase Quarterly Lettings Report – Q2 2019
As we near the end of July, we thought it might be a good time to look back at Aston Chase’s Rentals Department Q2 activity. In terms of overall performance, the total weekly rent roll from Q1 and Q2 display almost identical figures, with circa £70,000 per weeks’ worth of properties let.
The most notable change is a 50% increase in properties let in excess of £2,500 per week (Q1 to Q2). When looking at year on year data (Q2 2018 Vs Q2 2019), we have also noted a 12.5% increase in these tenancies.
This is likely due to the fact that during a period of political and economic uncertainty, renting a property is an increasingly attractive option for those who have a desire or need to be in London, without wanting to commit themselves for more than five years. It could also be linked to the positive effect that the continued weakness of Sterling is having on the rental market; people moving to the UK are able to get more for their money than ever before. Non-UK based applicants would likely have calculated a rental budget per month in their own currency, translating to a higher level of Sterling than it would have done previously, creating stronger budgets from our overseas applicants.
Therefore as long as London maintains (or increases) the level of employment opportunities it currently offers, people will continue to relocate here, be it for the long term (which is usually associated with buying) or the short term by renting a home.
In terms of demographics of Tenants, the biggest change from Q1 to Q2 has been the substantial increase in Tenants from North America; in Q1 these represented 6% of new tenancies, but in Q2 this has risen to 23%. A high percentage of these contain principal earners who are working in the finance and tech industries, and this is a general trend, as they make up the bulk of the Q2 Prime tenancies.
European tenants have fallen away slightly, but still comprise 22% (Q2, a fall from 34% in Q1). British Tenants make up 27% of Tenancies agreed in Q2 2019, a 10% drop from Q1 (37.5%), and Q2 of 2018 (33%). This is possibly a reflection of the fact that many domestic buyers are returning to the sales market, something we discussed in more detail in our quarterly sales review. The other notable change is in Middle Eastern based tenants who made up just 3% of Q1 tenancies but rose to make up 14% of Q2 Tenancies.
To conclude, it is becoming apparent that both because and in spite of a disrupted political and economic climate the Lettings market has continued to go from strength to strength. Our tenants are coming from further afield and spending more money on rent, proving that the notion that London is an attractive and sought-after destination continues to prevail. Of course, it remains to be seen what effect a Boris Johnson led Government along with an overdue Brexit resolution will have on the Lettings market, but whatever happens, it certainly won’t be boring!