Fitzrovia Buy To Let – Demand and Supply

Following on from my recent article about the state of the Fitzrovia property market and in particular what had happened to the rents Fitzrovia tenants have had to pay since the Credit Crunch, if you recall, I said rents in Fitzrovia are 21.49% higher than they were in 2008. A Fitzrovia landlord has since rung me after reading the Fitzrovia Property Blog, wanting to know more of the story of what was happening to current rents in the area. The reason he asked was that his current agent hadn’t increased his rent for a number of years and was concerned if he was getting the best return from his buy to let investment.

The Fitzrovia rental market is all about supply and demand (isn’t it so in all parts of the economy?). On the supply side, 98 rental properties have come up for let in the last 31 days in Fitzrovia. It sounds a lot until you consider there are 2,174 rental properties in Fitzrovia, that means only 4.5% of the rental stock of properties in Fitzrovia are coming onto the market each month (it is normally around 5%).  One reason for this lack of new rental properties coming on the market is the fact that tenants seem to be staying in properties longer.

With this lack of supply, newer tenants have to pay more to secure the property they want. And this is the crux of the matter ...properties they want. Older properties in Fitzrovia, that haven’t been maintained, still retain their wood chip wallpaper from the 1970’s and thread bare carpets have seen their rents drop. Tenants want either modern properties with all the mod cons or older style properties that have been presented to an exceptional standard – and they are prepared to pay for the privilege.

Rents for top quality properties in Fitzrovia have risen by 2.3% in the last month. Any properties, old or modern, put on the market in good or excellent condition will rent in a matter of days.  

Interestingly, looking at Fitzrovia property values, the Land Registry have just released their latest set of data on property values. Throughout April 2015 (the latest set of data), property values fell in Fitzrovia by 0.2%, however, they are still 10.2% higher than they were a year ago.  When one looks at the regional picture, the Greater London average property values rose by 2.3% in the last month. The difference doesn’t concern me, as the regional and local property values always even themselves out over the months. 

Looking forward, after considering all the statistics and talking to other property professionals, I expect property values in Fitzrovia to rise by 3% to 5% over the coming 12 months, following the Conservative victory.  In a forthcoming article, I will discuss how the number of properties changing hands each month has dropped considerably in the last 10 to 15 years in the area. 

...And so back to our landlord. Each property is unique and so as his tenancy agreement allows him to inspect the property with notice to the tenant, we will be visiting the property next week.  For more in depth thoughts and opinions like this on the Fitzrovia Property market ...visit the Fitzrovia Property Blog fitzroviapropertyblog.com