City centres saw an increase in properties available to rent as tenants became increasingly interested in living outside of their city, according to data from Rightmove.
Its rental trends tracker for October to December 2020 (Q4), published today (January 27) found an upward shift in the number of tenants enquiring about properties outside of their city.
The portal noted the continuing “popularity of a quieter life and more space driven by lockdown”, with the biggest changes in inner London and Edinburgh.
Rightmove added that an increase in tenants seeking the suburbs, as well as some short-lets changing to long-lets, had led to a significant rise in the number of properties available for rent in these city centres.
The portal noted that rental stock in five of the 10 cities studied had at least doubled last quarter when compared to Q4 2019.
Over half (55 per cent) of inner London tenants enquired about a property outside the city in Q4, up from 45 per cent in the same period in 2019.
Meanwhile, the number of Edinburgh tenants that enquired about leaving the city had risen to 37 per cent last quarter, from 29 per cent in Q4 2019.
Asking rents outside of the capital also reached a new record of £972 per calendar month in Q4, up 3.7 per cent annually.
In the capital, meanwhile, the average asking rent last quarter, at £1,932 per month, was 6.4 per cent lower year-on-year.
Rightmove added that this was driven by last quarter’s average monthly asking rent in inner London dropping by 12.4 per cent annually, while Outer London was flat at 0 per cent.
| National average asking rent for all property types (excluding Greater London) | |||
| Quarter | Average asking rent per month | Quarterly change | Annual change |
| Q4 2020 | £972 | 0.8% | 3.7% |
| Greater London average asking rent for all property types | |||
| Quarter | Average asking rent per month | Quarterly change | Annual change |
| Q4 2020 | £1,932 | -1.7% | -6.4% |
| Inner and Outer London | |||
Average asking rent per month | Quarterly change | Annual change | |
| Inner London | £2,219 | -3.0% | -12.4% |
| Outer London | £1,723 | -0.5% | 0.0% |
Tim Bannister, director of property data at Rightmove, said: “The price premium that many tenants are usually willing to pay to have the vibrancy of a city centre on their doorstep has been tempered for now.
“This brings a challenge for some landlords but also an opportunity for tenants who may be able to make a longer term decision and move into a city centre now, perhaps on a two year tenancy agreement, at a more attractive rent than this time last year.”
Mr Bannister also expressed confidence that higher rents would return under more ‘normal’ circumstances, but predicted that city centre properties with gardens and balconies would be able to “command the biggest premiums”.
He continued: “Outside city centres it’s a very different picture, with agents reporting extremely busy markets and rising rents. Available stock is lower than the usual level we would see at this time of year, and demand is higher, leading to a much better outlook for those landlords in the suburbs and in smaller towns and villages.”
Rightmove’s findings come after data from The Deposit Protection Service showed the average monthly rent for larger properties continued to increase at a faster rate than flats during the last quarter of 2020.
Marc von Grundherr, director of London-based estate agent Benham and Reeves, said: “With Covid continuing to pose a problem on an ongoing basis, many tenants simply aren’t committing to the high cost of renting in central London.
“This has been largely driven by the fact that many can now work remotely but this isn’t the only reason. Living in central London is as much about the social aspect, as it is about the convenient commute, and at present, the vast majority of the capital remains closed for business.
“As a result, demand has fallen dramatically causing rental stock to flood the market. This excess level of stock means that landlords are being forced to accept dramatically lower levels of rent just to avoid lengthy void periods between tenancies.”
Mr von Grundherr added they had seen a “sluggish” start to the year at their Canary Wharf branch, while offices in Ealing, Kew, Hampstead and Beauford Park had been “extremely busy”.
chloe.cheung@ft.com
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