New research into the rental market in the UK shows the cost of rental fell by more in London than almost any other region during 2020.
National estate agent Keller Williams UK found that COVID-19 caused rent prices in the capital to fall by an average of 3.4% last year – with the east of England and the south-east falling 2.4% and 1.6% respectively.
London in particular has suffered from falling demand due to the growing trend of remote working.
The overall decline is one that will be welcomed by tenants, who have seen consistent increases in rental prices in previous years, and who may have seen their ability to pay their rent decline due to the pandemic.
Keller Williams analysed rental market data looking at the average rental cost and how it has changed between 2020 and 2019.
The report – which analysed rental prices across 15 major cities in the UK – found that just Bournemouth has seen a larger decline than London, with the average monthly rent falling by 4.4% in 2020.
Bristol (-3.3%), Nottingham (-1.7%), and Portsmouth (-1.1%) also saw large declines in average rent.
However, not everywhere has seen the cost of renting fall. The north east of England has seen the largest increase in the cost of renting of all regions in England, with average monthly rent up 3% in 2020.
This growth is being driven by Newcastle, where the annual cost of renting jumped 16.6% during 2020 – the largest increase of all major cities analysed by Keller Williams.
Leeds (5.7%) saw the the second-largest increase, followed by Birmingham (3.3%) and Manchester (2.9%).
Keller Williams UK CEO Ben Taylor said: “It’s been a strange year for the rental market, and both tenants and landlords have faced challenges posed by the pandemic.
“The impact of COVID has been more pronounced across the less affordable regions of the rental market. This will have been largely due to lower demand, as well as being influenced by tenant affordability, with many struggling financially due to job losses and furlough.
“However, while tenants have seen a welcome reduction in the cost of renting, these regions remain home to the most robust rental costs, and this will reassure landlords.
“Many may have feared a far larger market collapse was on the cards and, so far, this simply hasn’t been the case.
“In fact, in many areas, the cost of renting has actually climbed despite the wider backdrop of a pandemic.
“With the vaccine now being rolled out and hopefully some light at the end of the tunnel, we should see market uncertainty settle down considerably throughout the course of this year.
“Although, based on how 2020 turned out, we will believe it when we see it.”
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