Canary Wharf Property Update June 2010

The summer has finally arrived and with it traditionally comes the busiest time for Canary Wharf estate agents. Short lets have been particularly strong this year with a mixture of holiday lets and corporate clients accommodating employees from overseas. Short lets are a win-win for landlords and tenants. Landlords benefit from 50% higher rent than an equivalent long let and tenants benefit from it being much more cost effective than an extended hotel stay.

The lettings market is experiencing a shortage of supply with continuing completion delays on some new build apartments due to restrictions on finance. This is causing rents to rise in the short term and may lead to sustained price rises over the coming year.
Another factor affecting the supply of rental units is the increasing number of investment landlords choosing to sell apartments rather than re let. With the abolition of Home Information Packs (HIPs) it is now easier for landlords to test the market since they only need an EPC in place to market their property for sale. We are seeing an increasing amount of stock coming onto the market for sale without an increasing number of buyers to match. Therefore there is continuing downward pressure on prices due to the increasing amount of choice available to buyers.
The recent budget has increased capital gains tax for second homes. There was talk of this being introduced next April but this in fact takes effect immediately so there will be no rush of landlords selling which should dampen supply a little. However, with mortgage costs likely to increase over time, many landlords are considering selling up anyway.

Looking forward to the rest of the year, there are still a number of new developments due to complete although still not many new starts. Canary Wharf Group now have planning permission for the final building on the original Canary Wharf Estate and will start work as soon as a tenant or buyer is found. With the working population of Canary Wharf continuing to increase the prospects for the local property market still looks positive.

If you have Property available to rent or sell in Canary Wharf call Angus Edy, Movello Managing Director on 020 7473 9533 or visit www.movello.com