While 2020 has been a challenging year all round, and brought many changes to the way people view their homes, one notable upside has been for London renters.
London has seen a significant reduction in rental prices, down as far as 20%* in some typically more prestigious postcodes such as Battersea and Knightsbridge, but on average, we have seen a 10%* reduction across our offices in Zones 1-3.
So what does this actually mean for Londoners looking to rent? Simply put, it means that tenants have the opportunity to explore new parts of London to live in, moving from areas like Clapham to more expensively renowned postcodes such as Chelsea, and all without having to increase their monthly rent.
The lack of travel due to the pandemic, as well as people not moving internationally for study, work or pleasure has played a part in this price drop. The decline of tenants searching for a move into the city has affected all price brackets, which has stimulated Landlords to make their rents more attractive.
In tandem, the usual city-based tenants have also moved further afield, out of London to areas such as Surrey and the Home Counties, driven by the need for more space. As properties have become more than just homes – they are schools, gyms and a workplace – there is also less need to consider a commute into the office in the short term.
Will this continue into 2021?
Moving into the New Year, we expect houses to continue to be more popular than flats, as well as the desire for gardens and living closer to ‘green areas’ near parks and commons – in locations such as Primrose Hill, Wimbledon, Chiswick and Wandsworth in South West London.
With hope that the vaccine roll-out builds momentum, this could mean that by Spring, London will be a very different city – re-open for business and students, as well as international tenants moving back to enjoy all the wonders that London life has to offer. In turn, we may see a surge in demand of pent up moves, meaning a potential rise in prices that would quickly bring back to levels closer to the beginning of 2020.
The best advice I can give to London tenants is "move now" and take advantage of the reduced rents and sign a long lease. You could benefit from renting a bigger home or a property in an area of London that you previously thought might have been out of your price range. If you are confident you will be happy to live in the property for 2-3 years, why not lock-in rent at a great value as soon as possible, and reap the benefits for months to come.
Jane Jenrick, Head of Lettings
*John D Wood & Co. internal data 2020