According to research London rental demand has dropped significantly since the start of the pandemic ..
With London at the centre of soaring COVID-19 infections, and an ever increasing ghost town due to multiply government lockdowns it’s not surprising that people don’t want to be in the capital. Figures published by flatshare site Spareroom shows a rapid decline in the number of renters across London with; West Central London showing the biggest drop in demand at -43%, followed by East Central (-39%) and West London (-26%)
Separate research conducted by property website Zoopla also shows that rents fell last year by 8.3 per cent in Greater London, the steepest annual fall since the financial crisis of 2008 with demand for properties in the capital down 10% year-on-year.
In stark contrast rural areas and neighbouring boroughs are witnessing a “halo effect” of rising demand and rents as tenants look for more open space, both indoors and outdoors.
Matt Hutchinson, director of SpareRoom, said: “We know that London is losing its appeal among young renters, with COVID changing the way we feel about home and how we live.The first national lockdown made people think twice about living in cities, especially London, and it’s clear to see this hasn’t changed. The result is a boom in demand outside London. It’s not just that people have left London, it’s that many of the industries that draw them there in such huge numbers are in crisis – that could take years to reverse. The positive in all of this is that it could herald the start of a UK economy that relies less heavily on one city.”
According to Grainne Gilmore, head of research, Zoopla, the outlook for the rental market in London depends to a large extent on how quickly a vaccine can reduce the impact of Covid-19 and enable normal business activity to resume, particularly in city centres. Even then, flexible working is likely to continue, meaning there may be a permanent shift in priorities for some renters. The demand for space is unlikely to diminish any time soon, which will continue to support the rental market for family homes.
“Changing working, commuting and tourism patterns were felt very quickly in the central London rental market. Now we are seeing the impact in other city centres, although on a more modest scale. Balancing the rental declines in inner cities is the strong rise in rental growth in surrounding ‘halo’ areas and well-connected towns across the UK, reflecting stronger demand in many of these markets among a cohort of renters.
“Overall, the uncertainty created by the pandemic, rising unemployment and limited mortgage availability for buyers with small deposits will continue to drive demand for rented homes. This demand, combined with a lack of new supply nationally, will support rental growth in the long run.”