A prominent agent says a huge over-supply of available rental property is now flooding the central London market, just as demand is sharply down because of Coronavirus.
Marc von Grundherr, director of Benham and Reeves, says: “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.”
von Grundherr says 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.
“Due to this we’ve seen a sluggish start to the year across some areas, such as our Canary Wharf branch.
“However, in contrast, demand remains extremely robust across London’s peripherals with tenants looking for a larger rental property with outdoor space. Our offices in Ealing, Kew, Hampstead and Beauford Park, for example, have been extremely busy. So much so we’ve had to redirect resource from our quieter locations in order to service the uplift in tenant activity in these locations.”
His comments back up a report this morning from Rightmove, suggesting that asking rents in major city centres areas have been badly hit, with Inner London faring worst of all.
The portal says average asking rents in Inner London are down 12.4 per cent, while the number of rental properties listed on Rightmove by Inner London agents is up 139 per cent on a year ago.
This post has originally been featured in Letting Agent Today.