The extraordinary pressures on the rental market exerted by the Covid pandemic are making their presence felt in the market as rents rocket outside the M25 and plummet inside it.
HomeLet, which says its index is the most comprehensive measure of rents in the UK, says rents in the capital dropped by 4.7% (see shocking graph below), the highest rate of decline every seen, last year.
But rents outside London have shot up by 6.2% over the same period pushing the average rent up by £151 a month or 6.2% year-on-year to £840 per tenancy.
Ten of the twelve regions monitored by HomeLet showed a YOY increase in rental values between February 2020 and February 2021. The East Midlands saw the most significant growth at 8.1%.
But landlords in London have reason to be apprehensive if rents are coming up for re-negotiation or tenants move out.
The huge exodus of 20-something from the capital, many of whom has chosen to return to their parents to work from home, is driving down rents rapidly.
One tenant that The Negotiator talked to, who wished to remain anonymous, said they had secured a two-bedroom flat North London for £1,650 a month that had previously been rented for just shy of £2,000.
Homelet says 11 of the 12 London boroughs it monitors say rental price increases last year.
“Andy Halstead HomeLet and Let Alliance CEO (pictured) says: “Those in the lettings sector warned of the Tenants Fees Act’s unintended consequences, along with the impact of the continued assault on landlords through policies that disincentives property investment.
“We’ve seen the volume of UK landlords dip, whilst supply from tenants has continued to grow.”
The average annual rental cost is now £11,808 per year for the 4.44m households who rent in the UK; this represents over £52bn per year in rental payments.
Graph: Annual Variance in Greater London Rent