According to Chestertons, in Central London landlords are forced to drop the prices of their rents due to their properties like apartments, stores, shops, etc. on average by 10%.
There are several factors which contributed to the reduction of London rental values. One of the factors is the number of students coming over from abroad looking for houses, who are in desperate need for suitable accommodation.
The other factor is a drop in the number of employees working in different country relocating to the UK, as no employer is ready to contribute towards the expenses for corporate relocations.
Furthermore, some tenants are forced to move back to their homes with family due to uncertainty about jobs or lack of new job opportunities.
These are the main contributing factors which have reduced the demands for accommodation, causing the price to drop to make the properties more attractive and affordable for the tenants.
This has led to tenants left with a wider range of options to choose from and select the cheapest accommodation they can find.
Richard Davies, Chestertons’ head of lettings, commented: “Many landlords are willing to reduce their rents to secure good tenants with which they can ride out the rest of the pandemic. As a result, we are experiencing a hectic start to the summer market, although unusually for this time of year, rents are down by an average of 10% and continuing to fall slightly”.
The Chesterton figures’, states that the number of new tenants registering for interest in a new property was raised by 43% as compared to May, whereas property viewings, offers and agreed tenancies were all raised up to 36%, 52% and 59% respectively.
Along with the above, the rental properties availability has risen up to 68%, which demonstrates that even the landlords are dropping their asking price in order to attract tenants so that they avoid the probability of their properties left vacant which would result in further income loss during this times of pandemic and the foreseeable future.
Davies said: “We are all hoping that there is no ‘second wave’ or another lockdown situation, but many tenants are taking the ‘better safe than sorry’ approach and securing a new property as soon as they can.”
“Many landlords are taking the same approach and are willing to reduce their rents in order to secure good tenants with which they can ride out the rest of the pandemic.”
The question is will the rents in London continue to fall. if so, will London house prices fall too?
Source: British Landlords Association
Author: Paul Ross
Date: 9th of April 2020