London’s rental market is performing strongly, and the Royal Borough of Kensington and Chelsea is seeing growing demand and rental yields, making it an exciting location for buy-to-let investors.
Rental demand, values and yields have been surging across London as the market has sprung back from the COVID-19 pandemic, particularly as many professionals have returned to the office. Currently, rental values in the capital are 9.4% higher than in 2020 and 4.7% higher than pre-pandemic in 2019, according to figures from Benham and Reeves.
The London rental market is proving to have recovered from the slowdown caused by COVID-19, successive lockdowns and the uncertainty that came with that. But it’s not just recovered, the market is currently exceeding levels seen prior to the pandemic.
Within the capital, Prime Central London’s rental market has been particularly strong, particularly with rental demand and values, and this includes the Royal Borough of Kensington and Chelsea, which fringes the edge of central London.
The rental market in Prime Central London
Knight Frank reveals London has become a landlord’s market. In the second half of 2021, Prime Central London’s rental market saw its strongest period of growth for some time. Rental values in the region increased by 2.8% in the three months to September.
The average rental value growth across Prime Central London was 4.2% for the three months to October. This is the highest quarterly figure seen since March 2011 and shows the strong growth being seen in the rental market.
A number of factors are causing this growth, including an uptick in demand and lack of supply across the market. This has driven more tenants to renew agreements more in advance than usual. And the outlook for the sector is expected to remain strong.
Rental growth in Kensington
Figures from Benham and Reeves revealed the average cost of rent in Kensington is £3,148 per month. This is a 3.1% rise from pre-pandemic levels in 2019 to now and 5.7% growth from 2020. This further shows the area is performing even better than before the pandemic and is expected to improve investors’ rental yields.
Additional investment is coming to Kensington, along with several regeneration projects that could be brought forward. This is causing the outlook for the area to look positive for the coming years as well.
Why Kensington is appealing for tenants and investors
Kensington in particular is an especially attractive area for tenants. The area of London is home to desirable neighbourhoods, strong transport links and connectivity, two Royal Parks and some of the city’s most famous museums.
There are thousands of businesses in the Royal Borough of Kensington and Chelsea alone, employing tens of thousands of workers. This brings many people looking for rental properties to this area of London. And with the return of international students, this is further boosting the area’s rental market.
At the same time, property investors are flocking to Kensington as the area has recently been crowned the top property hotspot for long-term house price growth. This paired with the strong rental demand and growth being seen makes it an area with enticing investment prospects.
Luxurious apartments at Cluny Mews
Salboy is working on its first residential development in London. Cluny Mews, located in the Royal Borough of Kensington and Chelsea, will provide 35 luxurious apartments in a private gated mews close to the wider Earls Court regeneration project.
Our construction partner Domis has started work on site. The first homes are expected to be completed at the end of 2023.
For more information on Cluny Mews, get in touch by giving us a call on +44(0) 161 884 3183 or sending us a message.