THE number of tenancies agreed across the Home Counties rental market between April and June was 50 per cent higher year-on-year, driven by an increase in demand from corporate tenants working in London.
In the first half of 2014, nearly 40 per cent of all tenancies agreed were to international tenants, led by individuals from North America.
Tenants relocating from the US are often present during the first half of the year, with many wanting to move before the new American school term starts in August.
Gordon Hood, head of residential lettings (Ascot, Beaconsfield and Henley) at Knight Frank, said: “At this time of year, pre-school year, the Home Counties lettings market is driven by corporate families looking to be located close to the excellent education available in the area. As the London sales market continues to grow rapidly, its comes as no surprise that we are assisting more families who are willing to look further afield to gain the obvious lifestyle benefits, such as open countryside, beautiful towns and recreational pursuits, which a Home Counties rental can offer.”
Not only have activity levels risen in the second quarter but there are indications that there could be a further pick up in the coming months with the number of potential tenants registering with Knight Frank lettings agents over the three months to June rising by 49 per cent, compared to the same period last year.
Prime rents in the Home Counties increased by 2.6 per cent in the second quarter of 2014, a marked improvement on the 0.7 per cent growth in the first quarter of the year.
Oliver Knight, from Knight Frank Research, said: “The recent strong performance of the Home Counties lettings market has come as global economies return to health, and business confidence in the UK grows.
“Corporate demand for rental accommodation has come from a range of industries including the oil and gas, tech and mining sectors.”
The growth of business confidence has prompted companies to expand and increase corporate relocations. In fact, the latest figures show business confidence was at a record high level in the second quarter of 2014.
However, despite two consecutive quarters of rental growth, over the 12 months to June 2014, rents are still 3.8 per cent lower.
Looking at supply, the number of new instructions — a good indicator on the level of stock coming on to the market — was 14 per cent higher across the Home Counties between April and June compared to the same period last year, although the rise varied depending on location. The strong prime sales market in Beaconsfield, for example, where prices rose by 5.4 per cent over the year to June 2014, has resulted in some landlords deciding that now is a good time to sell.
This has resulted in a fall in properties available to rent and could serve to underpin further rent rises in the area.