London Rents Remain in Decline
London rents fell significantly for the second quarter running.
For two consecutive quarters London saw a significant decline in average room rents, down -7% on Q3 2019.
The London postcodes seeing the most significant drop in rents are:
- EC3 (Aldgate)* -34%
- W9 (Maida Vale/Paddington) -20%
- SW1 (Westminster/Belgravia / Pimlico) -17%
- Excluding London, the UK saw an overall increase in room rents, up 2% on 2019
- Scotland is the only other UK region where rents fell, down 2% from £490 to £481
Although Covid-19 restrictions began to ease in Q3, the rental market in the capital still struggled to recover, with the average London room rent down 7%, from £780 in Q3 2019 to £725 in Q3 2020.
Rents in EC3/Aldgate (-34%) *, W9/Maida Vale/Paddington (-20%) and SW1/Westminster/Belgravia/Pimlico (-17%) saw the biggest falls in London, decreasing dramatically from £1,244, £983 and £1,108 to £824, £788 and £922 respectively year-on-year. In fact, the only London postcode district that didn’t see a drop is SE, with rents sitting at £713.
Taking a closer look at the capital’s postcodes, there were also dramatic rent decreases in W10 (North Kensington), NW8 (St John’s Wood) and W8 (Holland Park), all down by 16% from £932, £944 and £1,132 to £785, £797 and £956 respectively. NW1 (Camden) saw rents drop from £1,011 to £860 (-15%), with SW6 (Fulham) down 14% (£939 to £807) and SW8 (South Lambeth) down 13% (£856 to £744).
Although London fared worse than other English cities, Edinburgh saw the biggest rent drop out of the UK’s 50 largest towns and cities, with rents down 10% between Q3 2019 and Q3 2020. This decline played a role in making Scotland the only other UK region to experience an average drop in rents (down 2% YOY, from £490 in 2019 to £481 in 2020).
Of the UK’s 50 largest towns and cities, here are the places which saw the most dramatic declines:
- Edinburgh (down 10%)
- London (down 7%)
- Telford, Glasgow, Gloucester, Ipswich (all down 2%)
- Birmingham, Reading, Aberdeen, Stoke-on-Trent (all down 1%)
The data is the latest to be compiled as part of SpareRoom’s Quarterly Rental Index: a comprehensive overview of how the rental market is performing across the country, based on over 500,000 room listings.
Matt Hutchinson, SpareRoom Director comments:
“Once again, London dominates the headlines in terms of falling rents, and it’s generally the most expensive neighbourhoods that are worst affected. With so many young renters leaving the Capital, either to find cheaper rents, to move with family, or to leave the UK altogether, it’s hard to know when, or even if, London will regain the appeal it had before the pandemic.”
“What we’re seeing might just be a temporary shift in the rental market, or it may be the start of the UK’s rental map being redrawn permanently. Even if young renters do return to the Capital in their previous numbers, affordability will be their absolute top priority, in a city that already had an affordability crisis coming into this.”