The latest rental market snapshot from the property website Home talks of “a nightmare scenario for London landlords”.
Firstly, it says rents continue to plummet in Greater London, down 17.0 per cent year-on-year overall compared to 2020. Worse still, some boroughs registered reductions in the average rent in excess of 30 per cent.
Secondly, it warns that Greater London has worsening over-supply. Thirdly, Home suggests that London is likely to be suffering some of the country’s highest rent arrears, fuelled by Coronavirus.
This “is a nightmare scenario for many London landlords” the website states.
By contrast, a dramatic supply shortage is evident in all other English regions, and Scotland and Wales, thereby forcing up rents.
Home says some regions indicate drops of over 50 per cent in the total of newly available properties to let entering the market compared to a year ago.
The largest annualised rent hikes are in the North East (+16.6 per cent) and the West Midlands (+20.7 per cent).
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Yup, said this months and months ago!
Look on the bright side Mark. Landlords in other areas still enjoy soaring rents which will happen again in London once demand picks up again when people get fed up with home working and zoom meetings.
I think you will find it will be the opposite, the ripple effect and rents will drop everywhere.
Mark
I am talking from experience, not theory. All of my properties coming up for new rentals soon have multiple enquiries awaiting the opportunity to view when lockdown is finished, despite rents asked being 5 to 10% up on last year.
I know you'll be pleased for me!
Whilst London will suffer the most I havent seen any numbers like these published. Zoopla and Homelet had greater london rents falling between 6 & 9% last year and Savills latest data showed PCL rents dropped by 13% in 2020 but are now seeing a bit of a revival.
Mark, i will give you that one even though normally I don't agree with you about other things. A blind person could see this coming or anyone with a brain of more than a hen.
Yeah London's having it tough atm- but with as many as 1m people estimated to have left in the last 2 years (that's 15%) coupled with a massively reduced student market and a non-existant short let/holiday market. We are seeing rents on average down 15% and, indeed, have seen some properties have drops of 35%. This is also without factoring in voids which have also increased as supply oustrips demand so I think there will be some landlords seeing an income reduction as high as 50% when all things are factored in. It will recover, first;y when students return then as tourism picks up but it wont happen overnight. London has always been a market of peaks & troughs- that's the nature of the beast!
Our numbers in London don’t correlate to the above either. Maybe our rents were too low to begin with. Good high quality properties still have multiple applications.
Choose your agent wisely don’t be cheap and use amateurs that haven’t got the ability to deal in this market
Totally agree with you, my properties (NW2) are all full, my last new let were 2 in October, one reached a higher amount and a studio that was £1000PCM was re let at £975, no voids on either of them also.
Permitted development will make all these commercial properties easy to turn into resi, adding even more oversupply to London now all these commercial properties are going to be empty with bankruptcy
I think that great more properties more choice. People will be housed and happy. Only ones unhappy with this will be Shelter
Jahan Shelter represent the very sort of tenants that good landlords don't want at any price.
Nice cheery subject
Do you mean Shelter - I agree. But the reported rent increases outside of London is genuinely cheery and backed up by our own real life experiences over much of the UK.
Talking to our City based clients many are telling me that companies have told employees that they don't need to come back into the office until July. They were saying this last summer. Listening to senior figures in the City they have started talking about getting employees back into the office. I can see this happening soon as the City Institutions can see opportunities out there post BREXIT. What ever you think of the Banking Intuitions the City of London has been at the top of the tree for a long time. BREXIT and Covid are not the first massive shocks that they have had to live through, so far they have always navigated their way through and prospered.
Students will come back to London as soon as they can as will the tourists. Some retail properties will be demolished and replaced by residential units. Having said that I can't see my Tenants living on Oxford Street.
Personally I can't see the market getting back to where it was until late summer or may be even Christmas, but it will.
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