Private rents in London have fallen by as much as 20% in some parts of the capital, fuelled by fall in international student numbers, short lets flooding the market and an exodus of tenants to the suburbs.
A surplus of supply has left many landlords with little choice but to slash rents in order to attract tenants.
While the well documented ‘race to suburbia’ has hit rents, other factors include Airbnb investors putting their lets on the longer-term rental market as uncertainty remains over travelling, and a sharp decline in the number of overseas students, which has hit London landlords particularly hard.
Leading estate agents say average rents in London are down by around 4% year-on-year, or 6% to 7% in the so-called “prime” areas, but the true number could be much higher with some areas harder hit than others.
Glen Cook, at the sales and lettings agent Hamilton Brooks, based in the City of London, told the Guardian rents in and around the Barbican estate area had “probably dropped 20% since lockdown” fuelled in part by a big drop in the number of overseas students coming to the UK.
A report issued in June warned of “a potential drop in international students of 50% to 75%” this autumn.
Recent data released by estate agent Hamptons showed tenants were leaving the cities, with rental demand for urban areas down 23% across Britain.
But while average rents have fallen “by a few percentage points” this year in some areas, others have seen a growth.
Dan Parker, a divisional director in Savills lettings, said: “We’re seeing strong demand from people who want to walk to work. They see this limbo period before offices are fully back up and running as an opportunity to perhaps rent somewhere a little bigger or negotiate a small discount.”