London Rents Are Falling
Published: 01/06/2020 By WDShould you move now?
With rents currently falling by 15 per cent in some parts of London you should move now, if you can, to make long-term savings.
Latest figures from Rightmove show average asking rents are currently up 0.3 per cent on this time last year.
However, the average asking rent is lower than pre-lockdown prices at £1,993 per month, compared to £2,046.
While some landlords are dropping rents to attract viewings, others are listing at the same price they let for last year but accepting significantly lower offers.
The latest Royal Institution of Chartered Surveyors index predicts that rents will continue to fall across the UK in the next three months but will stabilise in 12 months.
By 2025 the industry body expects rents to be rising by about 2.5 per cent per year.
If you are in a position to move now without breaking your contract, you could find a cheaper home, or even trade up to a nicer area or property.
Having outside space, a home office and nice parks nearby have become the overwhelming preoccupation of lockdown.
The London zones where rents are falling
It should come as no surprise that rents in the capital have fallen after nine weeks of lockdown.
The housing market was on pause for seven of those weeks, with strict restrictions on home moves and viewings — eased only on May 13 — bringing it to an almost complete standstill.
Figures show that average rents have fallen by 1.3 per cent across London compared to last year, with the biggest falls seen in Zones 1-3.
In Zone 2 they were down 6.9 per cent to £2,520 a month, while Zone 1 rents dropped five per cent to £2,910.
With tourism hit, formerly short-term lets are flooding on to the long-term rental market.
With the market reopened and London tenants now looking to move house again, boosting demand, why are rents falling?
There’s still an imbalance between supply and demand because until restrictions eased, tenants were forced to put all but essential moves on hold, while landlords have continued to list their empty properties in the hope of avoiding a long and costly void period.
Affordability also plays a major role. With millions of renters now on the furlough scheme, many people’s incomes have already taken a 20 per cent hit, while many more are facing longer-term uncertainty around employment.
Where are rents falling most?
Room rental website SpareRoom pinpointed the London postcodes where rents have fallen the most since lockdown.
Its research finds that the largest rent reductions are in central London, with monthly falls of 12 per cent found in SW1, where the average room rent is now £952 per month.
The W1 postcode in and around Soho, Mayfair and Marylebone, saw the second-biggest rent drop, of 11 per cent, with the average room in the area now £1,012.