Looking back at London and Greater London Lettings 2023 | 03 January 2024

By Sylvie Harris

The year is ending as it started, with an imbalance between supply and demand. This has led to both an upward pressure on rentals with stock levels remaining significantly low.  

We have witnessed average rental values in prime and super prime central London rising again this year, driven by a persistent imbalance between supply and demand. Stock levels unable to keep up with sustained and higher levels of demand and Landlords have been considering the impact of the increasing laws. Prospective tenants have therefore been operating in a highly competitive market for much of 2023.

2024 Forecast for London Landlords

It appears rents and demand for rentals are set to grow further with landlords benefitting from the surges in rents. Many buyers will be put off by the instability in the housing market and the increased interest rates may mean that people looking for new homes may rent instead of buying for the time being. Renters will be required to put their best foot forward to secure themselves a property, on occasions offering above asking price. More expensive mortgages mean higher rents, which is why so many tenants have opted to renew tenancies and are staying put, creating a stable income stream for the landlord. The cost of borrowing will be off-putting for many landlords and may lead them to the decision to sell. There are some signs that supply is improving, with Landlords’ instructions gradually increasing. The recent upwards pressure on rent and favourable yield may continue driving so-called ‘accidental landlords’ back onto the rental market, adding to stock. It may be a while longer before we see some self-correction on rental levels, and the expectation is that rents will continue to rise, albeit at a much slower pace, with possible steady increases in 2024. Predictions continue to be difficult, and the market is still competitive, but a clear softening is occurring and may bring a little relief for prospective tenants in 2024 after some challenging years. If you are looking for advice or to rent out your property, do get in touch with our Lettings department either by calling:  020 7381 1856 or emailing: lettings@inhous.com

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FEES FOR TENANTS

Tenancy charges may vary, depending on the agreement we have with you, so it’s best to ask the INHOUS lettings department.

Permitted Charges in accordance with the Tenant Fee Act 2019

The following payments may apply when entering an Assured Shorthold Tenancy:

First month’s rent In advance
Tenancy Deposit 5 weeks, or 6 weeks if annual rent is over £50,000
Holding Deposit One week’s rent, put towards your first rent due
Early termination when requested by the tenant A charge not exceeding the financial loss experienced by the landlord
Default charge for late payment of rent A maximum of 3% above Bank of England base rate, charged when rent is more than 14 days late
Default charge for replacement of lost key or security device Equivalent to cost incurred
Changing the tenancy documents after the commencement of the tenancy, including change of sharer £50 incl. VAT

The following payments may apply when entering a Non-Housing Act Tenancy:

A Non-Housing Act Tenancy is formed when the annual rent exceeds £100,000 or the property is occupied by a Company rather that an individual.

  Inclusive of VAT
Tenancy Setup Fee drafting and execution of tenancy agreement if supplied by us, collecting and holding the Security Deposit as Stakeholder, issuing protection certificates, if applicable, Open Banking type referencing of tenant and initial Right to Rent Checks £360
Check-in Fee checking into the property and reviewing inventory minimum of £130
Tenancy Continuation negotiating and drafting an extension £150
Change of Sharer – Deed of Assignment £120
Early Termination – Deed of Surrender £120
Guarantor Referencing Fee (each): £30
Deed of Guarantee Fee: £50
Late payment of rent 3% above the Bank of England base rate

 

How to Rent Guides:

This guide is for tenants and landlords in the private rented sector to help them understand their rights and responsibilities. This guide includes a checklist and further detail on each stage of the rental process.

How to rent – GOV.UK (www.gov.uk)

FEES FOR LANDLORDS

Tenancy charges may vary, depending on the agreement we have with you, so it’s best to ask the INHOUS lettings department for a full breakdown of costs. Here’s a list of what you can typically expect to pay:

Lettings Service Only: 10%+VAT (12% inc. VAT) – Including rent collection
Letting and Management Service: 16%+VAT (19.2% inc. VAT)
Short Let (less than 6 months): 24%+VAT (28.8% inc. VAT)
Lettings Renewals Service: 8%+VAT (9.6% inc. VAT)
Lettings and Management Renewal: 14%+VAT (16.8% inc. VAT)
Short Let Renewal (less than 6 months): 24%+VAT (28.8% inc. VAT)

Pre-Tenancy

Additional non-optional fees and charges

We will not be charging clients fees for referencing, tenancy agreements or deposit registration.

The costs of a clean, EPC, gas safety, EICR, PAT and inventory are set by third party suppliers and prices may vary. The below schedule is to give you an idea of what you would typically pay.

All fees stated are inclusive of VAT (calculated at 20%):

During the tenancy (if required

INHOUS is a member of and covered by the ARLA/Propertymark Client Money Protection (CMP) Scheme.

We are also a member of a redress scheme provided by The Property Ombudsman www.tpos.co.uk.