UK Relocation: Renting in London
Posted by: Fiona Williams, Director, Strategic Business Solutions, EMEA
A global leader in terms of culture, commerce, education and entertainment, London is one of the most diverse cities in the world. But what’s it like to try to enter the city’s fast moving and very competitive rental market? Our latest UK MarketWatch discusses the topic, focusing on current trends and the possible impact that Brexit may have in years to come. We also invite you to watch our latest video on relocating to the UK. With a dedicated Destination Services team on the ground in the UK, we understand the potential challenges that companies and their international assignees may face when relocating.
Where to Live?
There are a number of different neighbourhoods and areas to live in. From apartments in the hub of the city for singles and couples, to townhouses and larger family homes in more leafy, residential areas. The city’s surrounding areas, collectively known as Greater London (which includes parts of Middlesex, Essex, Surrey, Kent and Hertfordshire), are particularly popular amongst expatriate families.
What’s Happening in the Market?
Prospective tenants continue to outnumber the city’s available properties. In the last 12 months, we have experienced an increase in demand for rental accommodation and as a result, vacancy rates – the length of time between rental property tenancies – are declining.
The Good News. Encouragingly, although prospective tenants remain high, rental prices are falling – albeit marginally in popular areas – which suggests that landlords are being fairly conservative when setting their rates. This could possibly be in response to the UK’s current economic uncertainty and concerns over tenant affordability.
The Bad News. Rents in London are indeed plateauing, but this follows years of rates outpacing a tenant’s income, so assignees should be mindful of this, because London remains one of the most expensive cities to live in by world standards.
The Brexit Factor
There has been uncertainty about the impact that Brexit may have on the rental market. Many experts suggest that instead of an immediate trend, a more long-term impact will be felt in the years following the UK leaving the EU. This is expected to be largely due to the dip in the number of EU nationals entering the private rental sector, which may influence demand levels and rental prices. Of course, EU migration will impact some parts of the country, like London and the South East, far more than others.
The recent General Election, which failed to produce a ruling majority party, has added to the political and economic uncertainty. After officially leaving the EU in March 2019, the UK Government has stated that it expects the UK to go through a three-year transitional period. So, although we have not yet experienced particularly strong housing trends as a direct consequence of Brexit, this may change in the coming months and years as the transition takes place.
Going forward, as more details become known about the Brexit process and transitional period, we will publish further information.
For a more detailed review of the UK rental and sales markets, read the Cartus UK MarketWatch and be sure to watch our newest video on relocating to the UK. For information on relocating around the world, visit our Resource Hub and On the Ground video series.