London rents could continue to fall this year if current trends continue, claims a new report from property website Zoopla.
According to its quarterly “UK Rental Market Report”, London rents have fallen 3 percent since the beginning of the year, further confirming that coronavirus has disrupted the capital’s rental market. The report predicts that if London rents continue to drop in the same fashion, tenants could see an annual decline of 5 percent. Annual rents in the capital have fallen by 1.4 percent, from June last year.
This overall fall in London rents has been largely driven by a drop in prices in central London, according to Zoopla. The report attributes this to an increase in “working-from-home policy”, causing many to leave the city, and a “decline in international travel and tourism” affecting the demand for properties. It also noted that supply was growing as a result of holiday lets flooding the market as long-term lets.
A fall in London rent costs does not guarantee affordability, however. While demand for rental properties in the centre may be shifting due to the change in work habits during coronavirus, a small drop in rents doesn’t change the fact that London tenants pay a large percentage of their salaries to live. Indeed the vulnerability of renters has increased during the pandemic, and many face homelessness when the eviction hiatus lifts.
The picture isn’t quite the same outside of London, however. According to Zoopla, annual rental prices continue to grow, albeit at a slower pace than last year. Rents outside of London have grown by 1.1 percent, down from 1.7 percent at around this time last year.
Nationally, there has been a slight increase in the number of homes for rent, at 7 percent higher than this time last year.
While some letting agents continue to report a decline in rent costs in some parts of London, the renting market in the city is far from hospitable to tenants. Polly Neate, chief executive of Shelter, told VICE News: “COVID-19 has shown just how vulnerable private renters are in our broken housing system. Job losses and reduced hours have put extra pressure on tenants, who already spend the lion’s share of their income on rent.
“The coming months are looking grim for private tenants unless the government gives judges the power to consider the impact of COVID-19 in eviction cases,” she continued. “Long-term, we need to see major reforms in renting to make sure people are getting a fair deal, and that means bringing forward the promised Renters’ Reform Bill and scrapping Section 21 ‘no-fault’ evictions.”