A discounting war is in full swing in the private rents in some parts of London as tenants quit the capital, due to the number of international students tumbles and companies put relocation plan on hold.
Landlords try to fill the properties or keep their existing tenants by slashing rents. The average rents in London are perhaps down by 4% compared last year and 6 to 7 percent in the so-called “prime” areas since the emergence of COVID-19.
And the phenomenon is not only restricted to London. Data released by other estate agencies shows that the demand from people searching for a place to rent in the city location is down by 23% across Britain. The monthly rental costs also plummeted in the cities in the Midlands and the north of England.
In an analysis of Rightmove listings, it shows that it’s not just the prime areas that the rents fell sharply, several areas in south London now have a significant proportion of listings with rents cut-off. In Upper Tooting, a reduction of almost 12% in rental prices can be seen. A four-bedroom house in Upper Tooting was listed at £2,850 per month in the mid of July is now at £2,500 per month. Meanwhile, some listings reduced £100.
As COVID-19 unraveled, the plunge in rent should not come in a surprise after surveys suggested that many city dwellers have either moved out already or planning to do so after the conclusion that work from home will take some time. Some city dwellers relocated to places that are not only cheaper in rent but offer more space or better access to the countryside, while others move back with their parents.
What are the other factors that push down the rents?
The priorities of many people changed. Some renters are choosing suburban life – leaving city life.
Other factors that affect the push down of rents, the corporate relocations are being put on hold due to the ever-changing health concerns. And due to a lack of tourists, Airbnb investors put their flats on the longer-term rental market. Although, it is assumed that those flats will go back to the tourism market once people can travel again.
Another main factor that pushes down the rents is the decline in the number of overseas students. The student market has become increasingly important to London’s landlords.
The lockdown and travel restrictions in the UK and other countries are stopping international students from coming to the UK. The dramatic drop of international students, the demand for student accommodation drops, thus, more rental properties are available on the market.
When the demand is low and the supply is high, it leads to the fall of the market price because of the surplus.
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