Low Stock Levels says Belvoir Lettings Camden.

Low Stock Levels says Belvoir Lettings Camden.
Reported from Lonres.

As stock levels in the sales market stay low, stymied purchasers continue to turn to the rental market for their accommodation needs. However, with stock levels equally constrained and existing occupiers choosing to stay put, those wishing to move within or into the area are facing increasing difficulties.

Supply and demand

In 2010, despite a stronger third quarter, there were 20% less rental properties available for letting over the year, compared to 2009 which contributed to a 10% rise in rental values over that year. Early indications for 2011 suggest that stock levels have increased slightly compared to the same period in 2010, although they are lower in London’s North and West areas. Nonetheless, supply remains tight, not helped by many existing tenants extending their leases and thereby further contributing to the low levels of available stock.

The level of houses available for rent seems to be particularly constrained, making up just 9.6% of lets across the area in 2010, the lowest level for five years. As a result, rental growth for houses out performed that of flats in 2010.

While stock levels are so low, simultaneously demand remains strong. The latest ARLA report from March 2011 says that demand for rental property will continue to outstrip supply for much of 2011 and into next year. The RICS survey also reports strong rental growth, particularly in London as demand continues to rise while supply remains tight.

As a result, properties are letting faster. The average time to let was quicker in 2010 (1.6 months) compared to previous years, and early indications are that it is even faster in 2011 (1.5 months). This is the same across all price levels - another indication of strong demand.

As supply eases slightly, activity in the rental market is not as frenzied as that being experienced in the current sales market. That said, any significant increase in supply seems unlikely and the market looks set to continue in similar vein over the rest of 2011, with low stock levels being further impacted by increased renewals, as tenants choose to stay put rather than enter an uncertain market.

Belvoir Lettings Camden
Tel: 02071 997733
1a Chalk Farm Parade
Adelaide Road
Camden, NW3 2BN