Over the last decade, London has experienced a heavily disrupted property cycle, but the increasing demand for rentals and a healthy economy promises an upturn for the market. The recently introduced tax regime meant that landlords would increase rent rates in a bid to recover the cost. However, the uncertainty surrounding Brexit compelled most landlords to forfeit this move to maintain the already unstable income. Also, the dwindling demand from EU migrants (who are considered London’s largest rental market) may have steadied the rent rates, though for a short time. Investors have stalled buying buy-to-let property since summer 2018. Experts believe it is a result of the direct impact of financial restraints on the buy-to-let market. This means that demand exceeds the supply of rental property, causing rental rates to increase. With tech giants like Google setting base in the capital, London is set to experience surging demand for rental property as staff relocate to the city. Property to rent in Chelsea has particularly experienced exponential demand after Google leased all commercial property between West 15th and West 16th streets at Eight Avenue. Prior to this, Apple had leased 45,000 square feet in 14th Street in 2007. As a result, this part of Chelsea has transitioned from a red-light district offering rooms to let by the hour to a mixture of trendy restaurants, swanky retail, a technology hub and raucous nightlife.
What is the Cost of Renting an Apartment in Chelsea
Chelsea has the highest number of wealthy foreigners who are looking to buy and rent as a means of protecting their investments from the turbulent Eurozone problem. Prices have soared so high that the average rate of renting flats in Chelsea is £2,253 per month. Figures from the Valuation Office Agency also reveal that Chelsea has the highest one-bedroom rental price, i.e., £1,842. The cost of a single room in the borough is £953 compared to other parts of West London like Hillingdon where the price is almost half at £406.
Why Rent Property in Chelsea
Chelsea is characterised by dotted with posh restaurants, classic architecture and designer shops. King’s Road is notably considered the centre of action as it has the busiest cafes during the day and bars crowded by young socialites at night. The only downside to living here is the transport links. The Sloane Square Station only connects the Circle and District lines, which may not favour those commuting to and from the North and South.
Costs Associated with Renting Property in Chelsea
The rental cost
The actual rent takes up a significant percentage of cost. Rent is expressed as a monthly (pcm) or weekly (ppw) cost. Note that the monthly rental cost is not the same as a four-week rent. The monthly rates are calculated by multiplying the weekly cost by 52 and dividing by 12.
It comprises 4-6 weeks of rent. The recent Tenant Fees Act of 2019 required the maximum deposit to be charged to five weeks only if the annual rent is less than £50,000.
The Tenant Fees Act of 2019 also stated that it was illegal for landlords to charge the following fees from 1st June 2019. The government intends to ban all such payments to make rental property affordable in the future. The law applies to long-term tenancies (tenancy lasting more than three months) that are usually under the Assured Shorthold Tenancy Contract.
- Contract fee: It is the cost of drawing up the contract and other administrative functions like inbound inventory.
- Guarantor check fee: Tenants engaging the services of a guarantor are required to pay a fee to an agency to verify the credit status of the guarantor.
- Reference checking fee: It covers the cost of verifying the tenants’ employment and his tenancy with previous landlords.
- Credit check fee: It caters to the cost of checking the tenants’ credit status through a credit reference agency.
- Tenancy renewal: This cost applies for tenants planning to renew their contract towards the expiry of the tenancy agreement.
- Check out fee: The fee covers the cost of checking the property when the tenant leaves.
When to Rent Property in Chelsea
The summer months experience the highest demand for rentals, making it a challenge to secure a property. This is because it is at this time that fresh graduates have completed their degrees and are relocating to new jobs. Also, corporate relocations occur during this period. If planning to move during the summer months, start looking for a house four weeks before the move-in date.