Rental prices in Surrey are booming

Despite the gloomy economic outlook, the Bank of England's surprise move to pump £75 billion into the UK economy should work in favour of landlords, according to one senior mortgage expert.

David Whittaker, managing director of Mortgages for Business, said that the prospect of the cost of living becoming ever more expensive will force more people into the private rental sector.

Sir Mervyn King has insisted that the Bank of England's move is the right thing to do for the economy as the country faces "the most serious financial crisis" ever seen.

But Whittaker believes that King's view will generally benefit landlords looking to take advantage of a pending rise in rental values, as housing supply struggles to cater for ever growing demand for properties to rent.

He comments: "The number of people reliant on the private rental sector will spiral as a result [another round of quantitative easing] and professional landlords and property investors will continue to benefit from the ongoing economic environment. Rates remain low and property prices are stagnating at best and this has given landlords the perfect opportunity to capitalise on high rental demand."

Rents recorded their largest monthly increase in a year during August, the latest buy-to-let from LSL Property Services shows.

In August, the average rent in England and Wales increased by 1.2 per cent to £713 per month, which is £27 higher than in August 2010.

David Newnes, estate agency managing director of LSL Property Services, says: "We are in the thick of the busiest time of year for the rental market, and red-hot demand for properties is driving rents up at their fastest monthly pace in the last 12 months."

In the last two years, average rents have risen by more than £50 a month. With a big rise in the number of hopeful buyers able to get a mortgage unlikely in the foreseeable future, rents are likely to rise further.

Mr Newnes adds: "Competition for rental accommodation will not drop and further rent rises remain on the cards."

On a monthly basis, rental rises across Surrey were among the highest in the country, due to growing demand for homes to rent.

Whether tenants are looking for a property to rent in Weybridge, property to rent in Cobham or a property to rent in Esher, demand and indeed rents appear to be growing no matter where property analysts look across Surrey.

Sharp elbows and top bids are required to secure the best homes - and that's just to rent, according to leading estate agents John D Wood & Co.

The company report that demand for homes in areas like Cobham, Weybridge and Esher, among others, is rising due to a greater desire among families and professionals to live in Surrey, as it offers the best of both worlds.

Surrey is generally seen as a welcome escape from the hustle and bustle of the city, but is still within easy commutable distance to London.

A company spokesperson said that prospective tenants are "in the midst of a bidding war".

In Esher, John D Wood & Co. reports that there are three families for every available property. In Cobham there is a real shortage of smaller cottages at under £4,000 per month.

In Weybridge, for example, the supply-demand imbalance is being exacerbated by growing interest from international tenants, particularly from Russia and the United States, wanting to be near the International School.

Whatever happens to the wider UK economy, rental demand for properties in Surrey is unlikely to wane any time soon, and neither are rental values.

London housing shortage pushes prices higher

A fundamental shortage of property for sale in London has pushed property prices to a record high, with very few new homes being built. Housing supply is falling while demand is growing, generating a mini boom in prime central London that could eventually benefit homeowners across the capital.

Various property price indexes reveal that homes at the high-end of the London property market are defying the wider UK housing market slowdown by proving big sellers.

Whether property for sale in Belgravia, property for sale in Chelsea or even property sale in Fulham, no matter where you look in prime London, the property market is being underpinned by a chronic shortage of homes, while demand for homes in London is continuing to soar.

In west London, for example, most Fulham estate agents and Chelsea estate agents agree that residential property prices across pricey areas like Chelsea and Fulham are rising, with some sought-after homes achieving over the asking price, due to increasing buyer demand, fuelled by city bonuses and more overseas purchasers.

Peter Young, managing director of John D Wood & Co, said: "Stock levels remain low across London which is frustrating the increasing number of purchasers keen to move, many of whom do not need mortgage financing for their onward purchase."

This strong demand is expected to ripple out to other parts of London once property prices further out of central London start to look increasingly attractive in relation to values in the prime market.

"With property prices in desirable areas like Belgravia and Chelsea expected to continue rising in the foreseeable future, it is highly likely that residential property values will also appreciate in other parts of the capital, including secondary locations," said Adam Feather, head of Robert Anthony estate agents.

In fact the latest Rightmove report shows that vendors across London raised asking prices by the most in seven months in September 2011 as a lack of properties for sale and increasing demand bolstered values. The study shows that asking prices rose 2.4 per cent from August.

"London's buoyant property market looks set for a brisk autumn as buyers chase a more limited choice of fresh properties," Miles Shipside, commercial director of Rightmove, said in the report. "With the continuing turmoil in the financial markets, and the threat of a Greek default, we are seeing a flight to safe assets."

Renowned property investor Neil Young, CEO of the Young Group, has amassed a small fortune from investing in properties in London thanks to sold rental returns and a good level of capital appreciations, and he expects this growth to continue.

"I specifically buy homes in London because it is a world city, with a great deal of demand. I strongly believe it has good future growth prospects," he said.

The prospect of capital growth is an attractive proposition for property investors and homeowners looking to one day move up or down the housing ladder. For a lot of people, property has become part of their investment strategy. With saving interest rates at a historic low and private sector pensions in a rather sorry state, many people are now relying on their homes to fund their retirement.

London property boom continues

Whether you are looking for a Property for sale in Kensington or a property for sale in South Kensington, the outcome is likely to be the same; there are very few property bargains available.

Many of the homes in these areas are subject to sealed bids, as London's property market continues to boom, on the back of rising demand and a lack of housing supply.

Property consultants Knight Frank report that average property prices in prime London, which includes Kensington and South Kensington, have appreciated by 36 per cent since their low after the credit crunch and banking crisis in 2009.

The firm projects that residential property prices in London hotspots will surge further; by an average of 30 per cent in the next four years.

"The prime London property market is buoyant," said Grainne Gilmore, head of UK residential research at Knight Frank.
Various South Kensington estate agents and Kensington estate agents would agree with Knight Frank's projection for growth in the capital.

In fact, most estate agents across central London would anticipate further capital growth in the heart of the capital, not to mention a hike in demand for rental accommodation.

Most Belgravia estate agents, for example, openly admit that they would love to have more homes on their books, as more house hunters search for the right Property for sale in Belgravia, while a growing number of tenants search for property to rent in Belgravia.

Peter Rollings, chief executive of estate agent Marsh & Parsons, told the press: "This year we've seen some of our busiest months since 2007, and are in the middle of another surge of activity.
Like other estate agents, he reports that more than 20 buyers are now registering for every prime London property placed on the market.
London's property market is being underpinned by improving jobs prospects in the City, combined with a rising volume of overseas buyers snapping up homes in London.
Most overseas nationals currently see properties in London as bargains, despite recent strong capital growth. This is mainly because of the weak nature of the UK currency against other major currencies.

The latest Bloomberg Correlation-Weighted Indexes shows that the UK pound has fallen by an average of 22 per cent against other major developed-market currencies.

Rollings added: "London is set to retain its appeal to international buyers – especially after the spectacular global PR it received from the royal wedding."
However, there are signs that UK buyers are also re-entering the market in London.

Jon Di-Stefano, chief executive of London-based property developer Telford Homes, said that his firm has seen a steady rise in demand from UK buyers across a range of its property developments.

"There is a terrific appetite [for properties], with more Brits buying in London," he said.

Di-Stefano's sentiments appear to be shared by a range of London-based property professionals, including Peter Young, managing director of John D Wood & Co.

Young remarked: "We have had a busy Summer with serious property purchasers postponing their holidays until they found and agreed terms on their new home. A number of record prices have being achieved [across prime London].