If London’s sales market has suffered because people can’t buy, the city’s rental industry is a victim of a lack of will. Landlords letting properties in the capital were the only ones in the country to overwhelmingly report a fall in tenant demand during the first quarter.
More than 50 per cent of landlords with properties in central London saw demand fall in the first quarter of 2021 compared with the same period in 2020, according to a survey of National Residential Landlords Association. Just 12 per cent reported that demand had increased.
The shift to homeworking has caused more renters to question the exorbitant cost of living in the capital, it would seem. Combined with a plunge in overseas tourists, which has forced more short-let properties back onto the lettings market, the fall in domestic demand has forced rents down.
Will the end of lockdown spark a return to London? Given the cultural richness of the city, the return of overseas visitors seems certain, the issue is more one of timing. Homegrown demand is less easy to predict. Much will depend on the extent to which employers allow flexible working to become more entrenched. The list of companies that have made the switch is growing, with accountancy firm BDO becoming one of the latest to add its name.
The seeds of recovery might have been sown. The April Royal Institution of Chartered Surveyors survey revealed that the 12-month view on rents moved slightly into positive territory for the first time since early 2020, although near-term expectations remained marginal negative. Renters in the capital will likely find themselves in a solid bartering position for a while yet.