Rent prices have fallen in London, according to data from renting site SpareRoom.
According to the property website, London room rents fell by 7 percent in May 2020, compared to May 2019. Rents in areas including west central, east central and the north west of the city have seen the biggest decrease. Rents in west central fell by 16 percent, east central by 15 percent, and the north west by 11 percent.
Breaking down these rent costs by postcode reveals more information about the decline. SpareRoom data shows that rooms in W10 (North Kensington) have seen the largest drop in room rents, falling by 23 percent to £763 per month, while rooms in WC1 (Bloomsbury and High Holborn) have fallen by 19 percent to £878. North London also saw a drop, with rents in NW8 and NW1, St. John’s Wood and Camden respectively, falling by 13 percent.
The cheapest area to rent in London, according to the data, was east London, with average rent prices of £682.
While year-on-year rents for May have fallen according to SpareRoom, the coronavirus pandemic has made the renting market unpredictable, meaning that figures like this need to be taken with a pinch of salt. According to data from RightMove, another housing site, the picture is slightly different. It says that "asking rental prices" for properties in London have increased during the pandemic. RightMove reports rent increases of 3.9 percent in March, 3 percent in April, and 0.4 percent in May compared to 2019.
The pandemic has caused other disruptions to the housing market. At the beginning of the lockdown, rental properties flooded the London market as a result of a decline in holiday let usage. With lockdown rules prohibiting people from staying overnight in Airbnbs, many Airbnb landlords put their properties on the market for short-term rents to help reclaim lost income.
With the housing market in an unprecedented situation, it’s hard to say conclusively why rent in some London postcodes may have fallen compared to last year, or whether this decrease will be at all indicative of private renting prices for the rest of year. At the start of the lockdown, private rents in England hit a record high, according to ONS data. However, as this data covered March 2019 to March 2020, it’s still too early to say how the pandemic will affect the housing market and specifically private rents in the long term.
What's for sure is that reported falls in monthly rents do not necessarily make London an affordable place to be a tenant, Portia Msimang of Renters' Rights London tells me. “In March of this year, rents reached a record high (London median £1,425) so a drop of 7 percent in some parts of town still leaves the cost of a decent home there out of reach for most,” she says.
“Many renters could not move now, even if they wished to, because reduced income caused rent arrears to build up during the pandemic,” she continues. “Where landlords have refused to negotiate any rent reduction, most have agreed to defer a portion of the payment due for a time. If those renters were to move out, their deposit would be used to cover arrears. If the arrears are greater than the deposit, they would still have a debt to pay off, as well. They have to stay put. And all the evidence Renters' Rights London has gathered suggests that renters are now much less willing to enter into a new, joint tenancy unless they have absolutely no choice.”