London’s rental prices have dropped by nearly 10% in the past year, making them more affordable now than they’ve been for the last decade.
According to the property portal Zoopla, average rents in London now account for 42% of the average single-earner’s income of £44,000pa, based on ONS earnings data. The figure is down from 49% in March 2020 at the start of the pandemic and from a peak of 53% during the fourth quarter of 2016.
Interest in rental properties is, however, now starting to bounce back. Since Easter, Zoopla said that demand has increased by 7% in inner London. This is expected to gain pace over the summer as restrictions around lockdown ease and renters return to the city having departed from the capital in their droves as the Covid-19 crisis worsened last year.
Zoopla says rental levels in the City of London, Kensington & Chelsea and Westminster are running at their lowest for a decade. The average monthly rent in Westminster currently stands at £2,259 compared with a high of £2,617 reached in February last year.
London’s renters are looking to capitalise on improved affordability by locking in cost savings for as long as possible. According to Zoopla, agents are reporting an increased number of longer-than-average tenancies being agreed. These, typically, are tenancies lasting longer than 12 months.
Gráinne Gilmore at Zoopla’s said: “In London, where rents are down 9.4% on the year, a modest reversal in rental declines has begun, but it will be a slow build back to pre-pandemic levels in inner London.
“The recovery will be uneven and we expect new or recently refurbished properties to attract higher levels of demand in the second half of this year.”