The Youngsters Behind London's Rental Boom
WHY YOU SHOULD CARE
Big cities and their big real estate mean big business. Enough about New York City — here’s the view from another world center.
By Anne Miller
Bad news: The only way to afford one of the world’s toniest cities may be to have mummy and daddy foot the bill for your flat.
In London’s high-end neighborhoods of Knightsbridge and Chelsea, the average cost of renting an apartment can top $10,000 a month.
Foreign students moving to London for a degree account for 29 percent.
of the London rental market, according to London Central Portfolio Limited, an asset management firm. And they’re not living in barrack-like student exchange housing of Prague or Jerusalem from back in the Gen X college days. Many of them are living in some of the most moneyed parts of the city. In Westminster, a two-bedroom goes for $1,757 a month. That’s not quite Manhattan prices, but it’s more monthly than many people’s mortgage payments.
London apartments have a 96-percent occupancy rate, with a rate of return for real estate investors of some 9 percent a year. The researchers and market watchers credit a lot of that to the international textbook set.
Real estate expert Nicola Livingstone says the foreign students are good for London — they have a reliable, steady stream of tenants with good backers (read: parents). But then again, the flip side is professionals pushed out of the central living areas, and the potential of rising rates in such a strong market.
What comes after gentrification? Are the oligarchs laying in wait? Time will tell …