PCL buying agency reports rental surge and off-market sales shift

Nearly a third of Black Brick's searches in Q1 were for rentals, while over a third of its purchases were made off-market...

Corroborating what we’ve been hearing from Knight Frank, Savills and others recently, buying agency Black Brick has reported a surge in prime and super-prime rental enquiries this year – along with higher numbers of vendors taking the off-market route.

Nearly a third (30%) of the Mayfair-based firm’s searches in Q1 were for rental properties, compared with just 8% in the same period last year. The trend is being attributed to higher transaction costs in the sales market, and overseas buyers getting to know the market before committing to an area, but as the agency’s founder Camilla Dell points out, finding the right rental property can be far from a walk in the park…

“Increases in Stamp Duty have added tens of thousands of pounds to the cost of moving house, meaning that buyers tend to want to take their time before making a purchase. Prime Central London rentals are particularly popular with overseas buyers, who wish to spend time getting to know London before committing to a purchase.

“However, although renting may be less of a financial commitment than buying, it comes with its own challenges. Rental properties tend to move very quickly, meaning that prospective tenants without representation on the ground can struggle to secure the best properties.

Landlords can often secure rents that are out of line with market values by taking advantage of tenants’ inexperience

“It can also be difficult to assess whether a tenancy offers good value. Parts of London’s rental market can get overheated, and landlords can often secure rents that are out of line with market values by taking advantage of tenants’ inexperience. Although solicitors are not involved in the rental process, tenancy agreements can be complex and can run to dozens of pages. As such, tenants need to check agreements carefully, for example, some agreements may not allow them to break the tenancy after six months.

“Coupled with the growing demand for its rental services, Black Brick is also seeing that a higher proportion of sales activity is taking place off-market. In June, more than a third of its sales transactions were off market, compared to under a quarter in the same month in 2016.

“Sellers at the top of the market have long taken such a discreet approach, for reasons of privacy and security. However, the off market method is being adopted more widely. In a slow market, many sellers are reluctant to put a public price tag on their home, and risk having to cut that price publicly if the property doesn’t sell.”

Camilla Dell is Managing Partner of Black Brick

black-brick.com

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