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September 7, 2010
Looking For Flats To Rent In London: A Lack Of Stock
I’ve spent the last few days looking for one-bed flats in West London. I say West London to the confusion and bane of many estate agents, as this is a rather wide area to encompass. I chose this over saying, Parsons Green, Fulham, Hammersmith, Earl’s Court, Brook Green, Pimlico, Kensington, Queensway, Notting Hill, Chelsea and the surrounding areas, mainly for convenience.
Wide search? I know. I would have been much happier looking only in a value for money area like Parsons Green or Pimlico, which are both excellent areas when it comes to safety, location, and cost. The issue was that I was looking for something available immediately, but there was nothing to be found. When I say there was nothing to be found I mean nearly nothing at all. I called agent after agent and kept hearing the same horror story about stock going fast and then not being replaced by anything. They had stock available in six weeks time, but now, no luck. Those who are living in these flats are not moving out and into nicer places like they are supposed to due to the uncertainty of the lending market.
Aside from being the stuff of nightmares for Toyota suppliers and Six-Sigma blackbelts the world over, this may well be a sign of things to come. Property experts are prophesying doom and darkness for the housing market, but much of that is based off of national data, and not indicative of London or prime-central London. Still, the recent figures indicating that banks are cutting back on loans coupled with the inevitable rise in interest rates means that fewer people will be willing to buy houses in the near future. This will slow, if not reverse, house price growth over the next few years. More people then will stick with renting a property rather than moving on to purchasing one. As a result, the rental market will look similar to how it has looked for me this week. London economy and jobs market will recover, but the houses those workers would otherwise buy may remain out of reach.
My advice for property seekers: be thorough. Call the agents, as many as you can find, and ask them what they have available. Don’t stop at what’s online or available at the biggest agents. You have to be proactive to get a property that fits your need. When you do find a place, move on it. Don’t take just anything, but also don’t sit and wait in case something better comes by. In this market when you find the right property you have to be willing to move and not worry about what may or may not come if you hold out.
My advice for investors is quite different: now may be a good time to invest in residential property, provided you have the cash to support the lower yields. Rental demand will be strong, driving up prices and creating fewer voids between tenancies. Lower house prices from fewer buyers will also help keep yields up as well. I believe that the political pressure to allow people to own their own homes will return in force and the government will have to find some way for housing to return to the growth levels it previously enjoyed. Once policy shifts back toward making homeownership more widely available, tenants will shift back to looking to buy, increasing prices. Residential investment may be a long term investment, but will become much more favourable in the years to come, as housing works out the problems it has faced from the credit crisis and buyers return to the market.