UK rental market “dragged down” by London crisis
A rental market snapshot says the UK-wide lettings picture is dragged down by Greater London’s excess of supply, and by the exodus of renters wanting to quit the capital because of Coronavirus.
Home, a property listing website that monitors the lettings and sales markets, says UK rents have fallen 0.9 per cent year-on-year.
However, it insists this national picture is “dragged down by an exodus-induced average rent drop of 16.9 per cent in Greater London.”
It says that by contrast there is actually a great scarcity of rental property available in most English regions and in Wales, thus forcing up rents in those locations. The largest annualised hikes are in the East Midlands – up 14.0 per cent – and the West Midlands, up 16.8 per cent.
“Greater London continues to indicate an oversupply in properties available to rent (up 37 per cent year-on-year). This worrying situation is already weighing heavy on the capital’s buy to let sales market and is likely to be exacerbated by the latest national lockdown” warns Home.
Doug Shephard, director of Home, says: “Oversupply is more acute in the London lettings market. Consequently, rents are collapsing in the more central London boroughs, slashed by landlords desperate to avoid painful void periods.
“This situation is undermining the fundamentals of the central London sales market, since ultimately it is the yield on property that underpins its capital value.
“Landlords in prime locations such as Westminster, Hammersmith & Fulham, Kensington & Chelsea and Islington have dropped asking rents by 34, 29, 28 and 25 per cent respectively. These are unprecedented falls and, judging by the continuing rate of decline, rents in central London are unlikely to stabilise anytime soon.
“Accelerated by the London exodus, rents and prices are climbing simultaneously throughout the rest of England and in Scotland and Wales. These markets, all underpinned by competitive lettings markets (low supply and rapidly rising rents), show extraordinary vigour and together they have boosted national average home price growth.”