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Private rents in London have dropped for the second quarter in a row, with some areas posting sharp falls of up to 34% year on year, while other cities led by Edinburgh have also reported a decline during the pandemic.
Although Covid-19 restrictions were eased over the summer, the rental market in the capital and other cities struggled to recover, according to the house-sharing website SpareRoom. The average monthly rent for a room in London fell to £725 between July and September, down 7% from £780 in the same period last year.
Excluding London, rents across the UK rose 2% to £492, on average. Scotland was the only other UK region where rents fell, by 2% from £490 to £481.
The rise in homeworking since the outbreak of the virus has led to increasing numbers of homeowners and renters moving out of big cities to suburbs, smaller towns and more rural areas in search of bigger homes, cost savings and green space.
Of the UK’s 50 largest towns and cities, Edinburgh had the biggest drop in rents, down 10%. Others including Telford, Glasgow, Gloucester and Ipswich fell 2%, while rents in Birmingham, Reading, Aberdeen, and Stoke-on-Trent slipped 1%.
Demand for gardens, patios and balconies among renters almost doubled over the summer. SpareRoom also found that tenants wanted to share with fewer people – the most popular option was just one other person.
In the capital, the areas with the biggest drops in rents were Aldgate in east London (EC3), where rents were down 34%, Maida Vale and Paddington in west London (W9), where rents dropped by 20%, and Westminster, Belgravia and Pimlico in the south-west (SW1), with a decline of 17%.
Matt Hutchinson, the communications director of SpareRoom, said: “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 estate agent in east London said: “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 said a one-bedroom flat in EC3 and EC1 cost £1,650 to £1,750 in monthly rent before the pandemic, but that had dropped to £1,300 to £1,350.
Rents in the capital were unlikely to recover soon, Hutchinson said. He questioned whether London and other big cities would ever regain the appeal they had before 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 run, “second or third tier cities may feel the benefit as people don’t want to live in London any more”, he said.
SpareRoom’s quarterly rental index is based on more than 500,000 room listings.
Source: The Guardian
Keyword: Private rents in London plunge by up to 34% amid Covid crisis | Money