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The Covid 19 pandemic saw people move from urban centers to rural areas in search of bigger spaces as they started working from home. However, renters are returning to major cities like London as offices and universities start returning to in-person attendance. As a result, there is an increase in demand for rental property, but the supply is low.
Mortgage lenders have increased their interest rates significantly. For instance, the Bank of England raised interest rates in September from 1.75% to 2.25%, marking the seventh rise since December 2021. As a result, the price of rental flats has also increased by 14.9% since the beginning of the year. The increase in house prices is only expected to increase. According to Savills, London’s rental prices will go up by 6.5% in 2023 and up to 22.2% in the next five years.
Do Hong Kongers have investment Opportunities in London?
The national Housing federation suggests new skills and methods of construction to solve the housing crisis in London, and developers agree. As the demand for proper and affordable housing in London increases, developers are meeting this demand with new build properties. According to Oliver Fursdon of Savills, the demand for development opportunities in London for the first half of 2022 significantly increased. Transaction value and volume will hold up well for the remainder of 2022.
New builds and older properties in London are capable of major re-positioning. Developers and investors are delivering exceptional workspaces and rental properties with outstanding amenities. Looking ahead, Hong Kong investors can occupy these new builds and older properties and shift the existing housing crisis for London residents.
Average rental rates in London
On average, rent prices are now more than £2,000 per month as the demand for housing in London increases. Out of 33 London Boroughs, 12 have an average rental rate of £2,000 per month, and none have average rents below £1,000.
The average rental rate for a one-bedroom in some areas of London is:
Ealing £1,759
Greenwich £1,674
Lewisham £1,660
Sutton £1,622
Enfield £1,619
Harrow £1,612
Hillingdon £1,586
Bromley £1,572
Croydon £1,526
London residents pay an average rate of £2.02 per square feet. As house prices increase, London tenants will spend up to 55% of their salaries on rent. Since 2021, the demand has increased by 32%, and the supply has decreased by 55%. This gap will continue to expand, presenting a unique opportunity for savvy Hong Kong investors.
