London rents ‘fall by 5% annually as Covid-19 means more people work remotely’

Average rents in London are 5% lower than a year ago, bucking an upward trend seen elsewhere in the UK, according to a property website.

Zoopla said the average monthly rent in London is now £1,596, which is 5.2% lower than a year ago.

Rents in London have now fallen to levels last seen in 2014, it said.

Its report said the central London rental market is being affected by changes in working trends.

Rental properties which were typically used by workers whose habit had been to stay in the capital for part of the week are coming back to the market as many people continue to work remotely from elsewhere.

Across the rest of the UK excluding London, rents have increased by 1.7% annually, to reach £744 per month on average.

Zoopla said that demand is outstripping supply in cities outside London.

It said that a squeeze on mortgage lending is making more people stay put in the rental sector when they may otherwise have bought.

Students returning to university this autumn will have also boosted demand in the rental sector.

Grainne Gilmore, Zoopla’s head of research, said: “The split in the rental market caused by Covid-19 has now crystallised and we are seeing the two-speed market firmly entrenched.

“For most of the UK, the demand/supply gap is underpinning moderate levels of rental growth.

“We haven’t seen the exodus of students from cities and, as more people are staying in the rental market given the squeeze on mortgage lending, higher levels of demand will continue to underpin rents.

“At the same time however, muted earnings growth will start to limit the headroom for rental growth in some markets.”

Here are average monthly rents in September 2020 according to Zoopla, the annual percentage change, and the average number of days it takes to let a home:

– Scotland, £631, 0.1%, 15

– Wales, £616, 2.5%, 21

– Northern Ireland, £590, 3.3%, 16

– North East, £520, 3.2%, 19

– North West, £619, 1.8%, 17

– Yorkshire and the Humber, £599, 2.3%, 19

– East Midlands, £660, 2.5%, 17

– West Midlands, £674, 0.0%, 19

– East of England, £894, 2.2%, 18

– London, £1,596, minus 5.2%, 17

– South East, £1,021, 0.8%, 19

– South West, £813, 2.7%, 16