London is the only major UK town or city facing a challenge of this scale, with all regions of the capital experiencing huge drops in demand due to the ongoing pandemic and shift in attitude towards renting in the city.
New research from flatshare site, SpareRoom, has revealed that West Central has experienced the biggest decrease year-on-year down -43%, closely followed by East Central (-39%) and West London (-26%). Even the most popular London postcode (East London) is struggling to withstand the effects of the pandemic, seeing a drop of -19%.
In Q4 2020 London rents were also down 8% from Q4 2019 to Q4 2020, the third consecutive quarter London has seen a significant decline.
Whilst the capital struggles to regain momentum, rental demand around the rest of the UK is looking encouraging, with no other key UK town or city showing a decline. In fact, many areas around the UK are now proving to be very desirable for renters – perhaps benefiting from people rejecting London. In particular, Ipswich (86%), Warrington (84%) and Northampton (82%) are experiencing the biggest increases in demand YOY.
Matt Hutchinson, SpareRoom Director, comments: “We know that London is losing its appeal among young renters, with COVID changing the way we feel about home and how we live. The first national lockdown made people think twice about living in cities, especially London, and it’s clear to see this hasn’t changed. The result is a boom in demand outside London.
When we first saw the sign of this we wondered if it was a temporary blip but, as we head into the second year of living with COVID, it’s hard not to see it as a permanent shift and potentially even the start of a new chapter in the UK’s relationship with its capital city. It’s not just that people have left London, it’s that many of the industries that draw them there in such huge numbers are in crisis - that could take years to reverse. The positive in all of this is that it could herald the start of a UK economy that relies less heavily on one city.”