Private rents in London plunge by up to 34% amid Covid crisis

Private rents in London have dropped for the second quarter in a row, with some areas posting sharp falls of up to 34% yr on yr, whereas different cities led by Edinburgh have additionally reported a decline through the pandemic.

Although Covid-19 restrictions had been eased over the summer season, the rental market in the capital and different cities struggled to get better, in accordance to the house-sharing web site SpareRoom. The common month-to-month lease for a room in London fell to £725 between July and September, down 7% from £780 in the identical interval final yr.

Excluding London, rents throughout the UK rose 2% to £492, on common. Scotland was the one different UK area the place rents fell, by 2% from £490 to £481.

The rise in homeworking for the reason that outbreak of the virus has led to rising numbers of house owners and renters shifting out of massive cities to suburbs, smaller cities and extra rural areas in search of larger houses, value financial savings and inexperienced area.

Rent graphic

Of the UK’s 50 largest cities and cities, Edinburgh had the largest drop in rents, down 10%. Others together with Telford, Glasgow, Gloucester and Ipswich fell 2%, whereas rents in Birmingham, Reading, Aberdeen, and Stoke-on-Trent slipped 1%.

Demand for gardens, patios and balconies among renters almost doubled over the summer season. SpareRoom additionally discovered that tenants wished to share with fewer individuals – the most well-liked choice was only one different particular person.

In the capital, the areas with the largest drops in rents had been Aldgate in east London (EC3), the place rents had been down 34%, Maida Vale and Paddington in west London (W9), the place rents dropped by 20%, and Westminster, Belgravia and Pimlico in the south-west (SW1), with a decline of 17%.

Rent graphic

Matt Hutchinson, the communications director of SpareRoom, mentioned: “The places that are more expensive usually see the biggest falls first, always the southwest and west of the capital. If people are feeling the pinch, the most expensive places are just out of budget.”

An property agent in east London mentioned: “Landlords are now focusing on job security more than they have ever done, rather than on price. For people who are furloughed and younger people [in insecure jobs], it’s a lot harder to find properties.”

He mentioned a one-bedroom flat in EC3 and EC1 value £1,650 to £1,750 in month-to-month lease earlier than the pandemic, however that had dropped to £1,300 to £1,350.

Rents in the capital had been unlikely to get better quickly, Hutchinson mentioned. He questioned whether or not London and different large cities would ever regain the enchantment that they had earlier than the pandemic, “with so many young renters leaving the capital, either to find cheaper rents, to move with family, or to leave the UK altogether”.

In the long term, “second or third tier cities may feel the benefit as people don’t want to live in London any more”, he mentioned.

SpareRoom’s quarterly rental index relies on greater than 500,000 room listings.

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