As new trends continue to unfold across the property market, we’ve taken a look at how lockdown has affected renters up and down the UK.
Our latest study shows that a significant number of tenants living in city centres have been rethinking where they want to live – with many choosing to move out to the suburbs.
The popularity of a quieter life in the suburbs is largely driven by the fact that many cultural and social venues in city centres are temporarily closed for business. As such, the convenience of living in central hubs is not as appealing as it once was.
Our research looked specifically at the centres of 10 of the biggest cities around the UK, and found that asking rents in some city centres saw annual falls of up to 12% in the last quarter of 2020.
These falls are a result of more tenants seeking the suburbs, as well as some short-lets changing to long-lets, which has led to a significant increase in the number of homes available for rent in these city centres.
In five of the cities, stock is at least double what it was this time last year. This is very different to the national picture where available stock is down by 9% compared to this time last year.
In all of the cities we studied, there has been an upward shift in the number of tenants who currently live in a city contacting lettings agents about properties outside of that city.
The biggest changes are in Inner London and Edinburgh. In Inner London, 53% of renters living there enquired about a property outside the city, up from 45% in the same period in 2019. In Edinburgh, the number of renters enquiring about leaving the city has risen from 29% to 37%.
Meanwhile, we can also reveal that Deal in Kent is the hottest rental market in the UK right now. Rents in the seaside town have increased by 31% (+£262) over the past 12 months.
In London, Greenfood in Ealing has seen the biggest annual rise in asking rents, with tenants now paying 18.2% (+£265) more rent than a year ago.
What are the key figures?
Where are the UK’s rental hotspots (outside London)?
Where are London’s rental hotspots?
Where are rents falling most, outside London?
Where are rents falling most in London?
What do the experts say?
Our resident property data expert Tim Bannister explained that renters looking to live in city centres should have a chance to negotiate more attractive terms with landlords at present.
He said: ”The price premium that many tenants are usually willing to pay to have the vibrancy of a city centre on their doorstep has been tempered for now.
“This brings a challenge for some landlords but also an opportunity for tenants who may be able to make a longer term decision and move into a city centre now, perhaps on a two year tenancy agreement, at a more attractive rent than this time last year.
“There’s no doubt that higher rents will return once life goes back to some form of normality, but it will be the city centre properties with gardens and balconies that will be able to command the biggest premiums. Outside city centres it’s a very different picture, with agents reporting extremely busy markets.
“Available stock is lower than the usual level we would see at this time of year, and demand is higher, leading to a much better outlook for those landlords in the suburbs and in smaller towns and villages.”
What are estate agents seeing?
Marc von Grundherr, Director of Benham and Reeves, said: “With Covid continuing to pose a problem on an ongoing basis, many tenants simply aren’t committing to the high cost of renting in central London. This has been largely driven by the fact that many can now work remotely but this isn’t the only reason.
“Living in central London is as much about the social aspect, as it is about the convenient commute, and at present, the vast majority of the capital remains closed for business. As a result, demand has fallen dramatically causing rental stock to flood the market. This excess level of stock means that landlords are being forced to accept dramatically lower levels of rent just to avoid lengthy void periods between tenancies.
“Due to this we’ve seen a sluggish start to the year across some areas, such as our Canary Wharf branch. However, in contrast, demand remains extremely robust across London’s peripherals with tenants looking for a larger rental property with outdoor space to beat the lockdown boredom.
“Our offices in Ealing, Kew, Hampstead and Beauford Park, for example, have been extremely busy. So much so we’ve had to redirect resource from our quieter locations in order to service the uplift in tenant activity in these locations.”
The header image for this article comes courtesy of Manchester Apartments.