Renters begin return to city centre living as rents remain low
Since Easter, renter demand has increased 26% in central Edinburgh, 12% in the centre of Leeds, 7% up in inner London and 5% in Manchester city centre, according to Zoopla.
Despite the improvement in tenant demand, rents still remain slightly lower than a year ago. Rents in Leeds are 0.7% down, 1.1% lower in Manchester and 3.2% down in Edinburgh.
David Ross, managing director, Hometrack, said: “Rental demand will continue to rise in city centres as offices start to re-open and this, coupled with increased affordability levels in many cases, will start to counter the negative pressure on rents seen over the last 12 months.
“In London, a modest reversal in rental declines has begun but it will be a slow build-back to pre-pandemic levels in inner London.”
The return of renters to inner London is partly due to a significant improvement to affordability; with rents down 9.4%. The drop in housing costs means affordability is running at a 10-year high.
Average rents in the City of London, Kensington and Chelsea, and Westminster are running at their lowest for a decade with average Westminster monthly rents now at £2,259 down from £2,617 in February last year.
Many of London’s renters are looking to future-proof current rental affordability with agents reporting an increased number of longer-than-average tenancies being agreed.
Richard Davies, head of lettings at London estate agent Chestertons, said: “A significant proportion of tenants in city centres are international students and corporate tenants.
“Due to Covid-related travel bans, this audience declined considerably, having a direct impact on the prime lettings markets.
“The number of available properties to rent is 83% higher than this time last year, which led to many landlords of top-end properties dropping their rents.
“Most tenants currently looking to move are already in rented accommodation but are eager to secure more property for their money.”
Outside of London, rents have risen by 3% year-on-year signalling the highest growth in four-and-a-half years.
The North East and South West have recorded the strongest rates of growth in their regions in a decade with year-on-year increases of 5.5% and 5.3% respectively.
Rental performance outside of London is being driven by a 59% uptick in demand for rental properties in the 28 days to the end of April. This is compared to the average demand recorded during the same month in the 2017 to 2019 markets which are considered to be normal benchmark years for market activity.