London rents drop three per cent as demand falls
Rents in London have fallen three per cent this year, with a sharper decline expected by the end of 2020, due to a collapse in demand during the coronavirus lockdown.
Rents in the capital are expected to shrink by five per cent by the end of the year due to steep declines in the number of international tourists seeking accommodation and a smaller student summer influx.
The rise in homeworking has also caused fewer people to move to London for work, prompting rents in the capital to fall for the second time in the last three years.
Meanwhile, annual rental growth for the UK is up 1.1 per cent, down from 1.7 7 per cent a year ago.
Research by property platform Zoopla forecast that rents in the UK outside of London will slow from 2.2 per cent growth to one per cent by the end of the year.
Zoopla head of research Grainne Gilmore said: “The future path of annual rental growth will be determined largely by the economic outlook, especially the rise in unemployment and the future path of average earnings.
“However, as new rental supply continues to catch up with demand levels, we could see further softening of headline rental growth by the end of the year, although there will be some areas of outperformance.
“Uncertainty continues over how any further outbreaks of Covid will impact the resumption of office life, student life and tourism, and this uncertainty will impact demand in some markets during the rest of the year.”