London lettings agency Benham and Reeves has drawn up a league table of which boroughs in the capital have had their rental markets hit most heavily.
It says the pandemic and a move towards working from home have combined to make many professionals think twice before moving to the capital, prompting a fall in both demand and rents.
Benham and Reeves says the figures show that while house prices have climbed since December, the average London rent has fallen 3.1 per cent from £1,697 per month to £1,644.
As a result, the average landlord has also seen their rental yield decline by 0.2 per cent.
Camden has seen the largest decline in the average rent, down 9.2 per cent, along with the City of London (down 7.0 per cent), Kingston (down 6.0 per cent), Hounslow (falling 5.6 per cent) and Hillingdon (down 5.5 per cent).
The average rental yield has also dropped in 19 boroughs with the City of London, Brent and Camden seeing the largest declines.
But it’s not all bad news for London landlords as some boroughs have provided a glimmer of hope for an otherwise weary buy to let sector in the capital.
The average rent in Lambeth has jumped 8.8 per cent so far this year, with Ealing and Merton (both 7.2 per cent), Haringey (7.1 per cent) and Greenwich (5.1 per cent) seeing particularly strong growth.
Director of Benham and Reeves, Marc von Grundherr, says: “It’s an incredibly tough time for the London rental sector at present with the pandemic bringing a notable decline in the otherwise consistently high levels of rental demand seen in the capital. As a result, many landlords are having to reduce their rental income expectations in an attempt to secure some form of income.
“This comes on top of a string of government changes to the sector in recent years that had already dented the profitability of investing in London bricks and mortar. With London’s landlords already forced to operate with extremely fine margins, this latest decline could spur many to reevaluate their buy-to-let activity.
“Yes, the declines in rent and yields may seem marginal, but they certainly aren’t in the context of a buy-to-let and it’s imperative that the government does more to help landlords and to support the backbone of the London rental sector.”
This post has originally been featured in Letting Agent Today.