Budgeting is a big part of relocation and when it comes to finding a property for clients – especially in London – rents can mean the difference between straying into the red or keeping in the black.
Relocation experts should have their finger on the pulse in terms of rental trends in London’s different boroughs and how the movement of big business is affecting premiums.
New research from Knight Frank has shed light on how rents for prime properties differ across the capital. It is thought the migration of financial service tenants and highly mobile tech companies are behind certain rises in residential rents. Figures suggest it is the City and City fringes that are experiencing the highest rise in rental values, with growth of 2.2%, hotly followed by King’s Cross (1.8%) and Tower Hill (1.4%).
In contrast, traditional prime property hunting grounds are losing traction in terms of rental values. Chelsea, Knightsbridge and Belgravia fell by 4.6%, 3.1% and 2.2%, respectively. Also on a downwards trend were rental values in St John’s Wood (down 1.5%) and Kensington (down 1.3%). Drawing back and looking at the bigger picture, Knight Frank forecasts rental growth this year of 2.5% in markets east of Mayfair and south of the Thames – eclipsing predictions of just 1% growth in western areas of prime Central London.
It is the activity of global businesses like Amazon – which is in the process of relocating its UK operations to sites in Shoreditch and Farringdon – and Google, which is commissioning a brand new £1 billion London HQ in King’s Cross, that is helping redistribute rental wealth.
So where’s next? Reports that Tech City at Old Street is no longer the home of start-ups, social media pioneers and app developers are grossly exaggerated, although office space isn’t as readily available as it was – and it is significantly more expensive.
Businesses and staff are expected to move even further east, especially now that The Queen Elizabeth Olympic Park in Stratford has been assigned as a new digital hub for startups. Canary Wharf is also shaking off its fusty image as the home of banking, with a growing number of tech companies choosing the Docklands as its base (take a look at www.level39.co for a flavour of what’s happening).
Don’t be surprised, however, if you’re asked to relocate professionals further afield than London. Surrey is gaining a reputation as a tech talent hotbed, with over 1,000 tech and media businesses based in Croydon and a further 830 tech companies in the wider borough. Moving even further out, Newcastle, Manchester, Birmingham and Bristol have all been flagged up places to watch out for.
For advice on rental values, rental properties and orientation, contact Klippa Relocation today. We work with leading lettings agents across the UK to assess the current and future lettings market.