As we come to the end of the first quarter of 2008 and, as spring seems finally to have sprung, the lettings market in London also seems to be hotting up.

Across our nine offices in the capital, our records show that property is taking an average of 10 days to let and we have many tenants ready and waiting for property in all the prime areas of London.

It doesn’t matter if it’s small, large, converted or purpose built ?we need all types of property to meet current demand and we would be surprised if any landlords are seriously considering selling their investment property the way the rental market is at the moment. All our landlords are delighted - yields are up and property is letting, mostly before the previous tenant has even left.

Perhaps one of the reasons for the somewhat frantic activity in the rental market is that house buying has moved out of reach of the younger generation, as prices spiralled out of control over the past few years. This was confirmed by the latest Personal Credit Index research published by CreditExpert.co.uk, which reported that 48% of residential tenants believe that they will continue to rent, and see no prospect of being able to get on the housing ladder.

Could it be that the love affair between the Englishman and his ‘castle?is well and truly over and that, rather than follow our habitual inclination to buy, we are set to become a nation of renters instead? Perhaps this sea change in how we live is less unexpected when you consider that the proportion of the family budget spent on accommodation has jumped from 9% in the 1950’s to 25%. Add to that the problems of student debt, and the imponderables of getting together the deposit when buying a home, and renting is looking a lot more appealing - particularly for newly-weds and singles.

Landlords, on the other hand, seem to be donning their buying hats and are investing in yet more property throughout the capital. This again has been reinforced by the Council of Mortgage Lenders (UK), which reports that the number of buy-to-let loans (including re-mortgages), taken out during the second half of last year, climbed 4% to 179,100, up from 171,800 in the first half of 2007.

Many landlords are updating their properties so that they can ensure a quick let ?this is key if you want to keep void periods to a minimum. Tenants will often take a property on the spot if it looks pristine and contemporary.

With the sales market in the doldrums, investors must do their homework if considering adding to their portfolio. Where possible, buy in the best possible location you can, the nearer to central London the better. Prime areas are always in high demand.

So it looks like 2008, far from being the predicted disaster for the property markets, is going to be a year of respectable yields and low voids ?just the type of conditions landlords like.

Wycombe Square, Kensington, W8. Refurbished buildings with contemporary interiors and new residential developments remain most sought-after by corporate tenants in prime London.

This article was written by Anita Mehra of Benham and Reeves who in conjunction with The Henley Group will be hosting a FREE seminar called ‘How to make money in the London property market? This seminar will take place in Singapore on Tuesday May 6th and in Hong Kong on Thursday May 8th. Book early to ensure your place as these seminars are very popular.

For further information on any of these property markets contact us.

The above commentary has been provided independently by Benham and Reeves and is for reference only. As with any market, conditions do change and of course personal circumstances vary from client to client. You are therefore advised not to rely on the information above, but instead to contact one of Benham and Reeves?consultants before deciding to follow any course of action. The Henley Group Limited shall not be responsible or liable for any damage or loss caused by the use or reliance on the information provided.