Rents in London fell again in July – usually a busy period for the market in the capital – amid the continuing upheaval caused by coronavirus.

The average rent in London dropped 4.2 per cent compared to the same period last year, bringing it down to £1,755 per month.

This was particularly driven by inner London, where prices fell 8.4 per cent year on year.

Hamptons attributed the fall to more Airbnb-style short lets being offered as longer-term rentals and flooding the market, as tourism figures plunge in the capital and corporate relocations are put on hold.

The estate agent said more than a third of London short lets are now being offered for long-term occupation, boosting the number of rental homes in inner London by 42 per cent and pushing down the cost of renting.

Offered for rent on a nightly basis, short lets are significantly more lucrative than traditional rentals. But short-let landlords are seeing their incomes reduced by an average of £1,952 a month. In Zone 1 this fall in rental income can be as much as £2,654, equating to a 40 per cent hit.

Aneisha Beveridge, head of research at Hamptons, said: “For years there had been a steady stream of landlords moving from the long to the short-let market in search of higher returns. However, following lockdown and in the two months since late May, this shift has been completely reversed with growing numbers of landlords looking to secure longer-term tenants.

“This is particularly evident in urban tourist and corporate relocation hotspots, nowhere more so than central London.

“And with three quarters of landlords who have secured a long-term tenant signing 12-month or longer contracts, they are unlikely to return to the short-let market any time soon.”

The London borough with the most post-lockdown summer instructions that were previously short lets was Lambeth, where 17.2 per cent of new listings had been used as Airbnbs or similar.

Hammersmith & Fulham (14.5 per cent) and Kensington & Chelsea (12.9 per cent) had the next highest switches from short to long lets.

By contrast, the Hamptons research found coastal and rural short lets are still performing more strongly, as Britain enjoys a summer staycation boom.

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