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Hello, and welcome to London property the home of super prime. I'm your host Farnaz Fazaipour And today we're welcoming Stephanie Russo of Chestertons to the show. Welcome to the show. Thank you for having me. So, Stephanie, you your career. Yeah, I'm going to let you tell us more about your career, but your career has been focused mostly on rentals, correct? Yes. So tell us first of all, a little bit about yourself. And then we'll go into what you think's going on in the market at the moment.
So I started in properties in Australia, actually on the holiday letting concept and helping and doing little bit of property management and rentals, then moved back to Paris for a year. And in Paris, the model is very much during sales and lettings at the same time, stay there only for nine months and arrived in London, six, seven years ago now and always been in rental starting as negotiator then value and then manager for the past two, three years, in Kensington. And it's
a fast paced industry, really the rental side, especially because you know, people make decisions a lot faster, and they move a lot faster. So what would you say have been the sort of general characteristics of the market recently, Have you have you noticed changes in how the rental market is evolving? Do you think has changed a lot in the past quarter or I
think and I discussed this morning, actually with a client of mine how the impact of you know the worldwide events of wars or that have an impact geo Lupu, politically or financially, whether it's the mortgage rates that are extremely high. Now obviously, going down slowly have an impact on even tenants because in the area of Kensington, we deal with a certain calibre of tenants who work mainly in financial services. So it does affect the decisions even for long term, whether to stay in London or not, and for how long they would choose the place for. And also just to simply make a decision. I have seen that over the past two months. How much longer it takes, actually, for people to make a decision. They have to see way more properties. And yeah, they look online, and they trust themselves more than agent generally speaking. That's what I think. So
there was apparently and I only heard this in the marketplace, but apparently there was a white paper that says 82% of landlords are not using letting agents anymore. Did you hear this? I didn't know. So, thankfully, I think it hasn't reached London yet. But are you seeing any kind of movement towards? I mean, if you're saying that they they trust their own judgement more than they do the agents? Are you noticing any kind of movement where landlords are becoming a bit more self reliant rather than always using agents for lettings? Regulation? Management? What What have you noticed?
Yeah, I have noticed this here, then a few of my clients, they would, you know, they made the comment saying I would like to save some money, so I'm going to try to rent it in myself. But the reality is that, do they know really what they have to do? Do they know? The process and the legal courses that they have to follow and the contract that needs to be updated and an agent, such as Chestertons, obviously provide that service to a very high standard. And you don't have that with all the while smaller online services that you can use yourself. So
there seems to be you know, I always find that when when people hit financial hardship or cashflow problems, they always look to take it out on the agent. It's like, they always go after the fees of the agent when they're selling something, they're not getting the price they want. They go after that 1% that they're gonna negotiate. And it's sort of the same thing in rentals at the moment, right? Everyone's being squashed what they can deduct from the interest payment, but what they can't deduct from from their income before paying tax. So they're looking to see where they're saving, but also, there is a lot of regulation in rentals. Right so it's becoming a lot more complex. Have you had Have you had any feeling that lots of buy to let investors are considering leaving the market?
Yes, indeed. I Um, but they're not it depends on their personal or their financial situation, depending when they buy the property, what price? Did they bought the property? Do they have a mortgage? Or? So do they need the cash now? Or can they wait? So you have a lot of clients who have considered but did not necessarily exit, they just wait and they try the market just to test it. My thoughts are the next six months are going to be quite crucial. And we're going to see maybe a little bit more movement with more, you know, stability in, you know, the world, generally speaking. And also, yeah,
so the investors are really leaving reluctantly, rather than leaving in a rush. So they're trying to stay if they can, is that what you're saying?
Yeah. And also with, you know, this discussion about section 21, that might be removed. So to explain it's, you know, the landlord being able to serve notice on their tenants, which might be removed, but the reality I mean, I come from firms. And this has always been the case. And it doesn't mean that the tenancy doesn't go well, it doesn't mean that people are leaving in bad terms, or there's more conflict, no, is just, you know, adapting to what is going to be more
security, people need more security, because rental is actually becoming their home. Correct? Yeah. So if you were to say that there is a pattern that you're noticing, what would you say that pattern is in the rental market at the moment? Or is there anything visible? Like, you know, people being more transient or less transient? What what are you noticing?
I mean, the main point is, everyone is really careful when they say when they do and before moving forward, then, you know, always asking so many questions, whether it's on the landlord or the tenant side, they just, they are scared to make a bad decision, they are scared to going into bad tenancy, that is not going to be favourable to them, on what, whatever side they're on.
And have you noticed any sort of Brexit leftovers in the rental market, as Brexit hadn't any kind of effect that you're now seeing? Yeah, this is definitely because of Brexit.
We felt it, obviously, during COVID. I mean, the years you know, 2020 2021, were quite tough, because a lot of phones and French people decided to leave and moving back to France. And they said, This is enough. We don't want to be here anymore. But the reality is that, and I work very closely with corporate departments. And last year, we've done the most corporate tenancies, meaning that a lot of relocation agent will contact them, and come through us and, you know, companies such as L'Oreal, or BP or Facebook, or, you know, the film industries as well, I'm coming back to the UK. So I, I don't think I don't feel that Brexit has affected more than that
at this stage. Okay. Yeah. Good to hear. And the other question I wanted to ask you is, you know, the sort of super prime, and the really expensive end of the market is something that's kind of developed more over the last decade than then, you know, it wasn't really a thing to rent things for 20 30,000 pounds a week. But do you find that this is a sector has become a lot more established? And are you seeing a movement from people actually deciding not to buy and to just rent as a lifestyle? For the big houses?
Yes, correct. I mean, because probably, and I don't go into too much details with the tenants because then they can be quite private about their finance, but, you know, you have some tax exemption and some positivity in renting rather than buying, keeping their, you know, cash flow to just do some more financial movement. So rather than tying themselves up with buying a property they prefer to rent and you know, adding six months very close one year break close, where they are actually able to exit the tenancy if they want to.
So that flexibility something's becoming more common that people want to actually have the option to break. Yeah,
correct. A lot of people are asking me,
okay, so you mentioned that you think the next six months will be quite crucial in what's going to happen in the rental market, but if you did have a crystal ball, what would you say 2024 is going to bring?
I mean, it's I I don't necessarily like to come in because I don't know what the future is going to be. I a big I'm a big believer in making your market, you just have to adapt. I think that good agents and smart one just have to adapt with being trustworthy with, you know, their clients with their tenants, and making sure that everyone is happy at the end of the day, this is why we are paid as well to make sure that everything goes as smooth as possible. Yeah,
I always think that markets find a way personally. And I also think that their quarterly cycles, I don't know whether that's just me, but I feel like in London, you know, from one quarter to the next quarter, it could be a completely different market, correct?
Yeah, totally. I've seen that a lot, especially last year. And I thought, because that was the 2022 was the first year where there was totally the end of COVID. And we had a lot of corporate search is, but every six weeks, I would see really a difference in terms of how people will react to the market, how they will look for a property or if there would be an overflow of students looking or professionals or family and it would vary all throughout the year.
Yeah. Wouldn't it be nice if everybody listen to their agents? And actually, I promise you things change really quickly. You may think you know, better than us, but sometimes it's good to listen, I agree. Thank you very much for joining us. We look forward to welcome you back to the show. And thanks for your insights.
Thank you so much. Thanks
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