Published by: Hugh Graham - The Times Bricks and MortarIt is the revenge of generation rent. After years of being squeezed by landlords, some London renters are having the last laugh — one bright spot in the pandemic gloom — as previously unaffordable neighbourhoods in the capital are now within their grasp.
It is all the more satisfying after years of being told that, no, the surfeit of Airbnbs in London did not reduce housing supply and push up rents for locals. But since the pandemic killed off tourism, an estimated one in eight flats on the market in inner London in 2020 was a former Airbnb or short-let property. The average achieved rent in prime London fell 13 per cent from January 2020 to January 2021, while the number of properties available to let is up 66 per cent from this time a year ago — the highest stock levels since 2009 — and in January 2021 the average time a property had been on the market was 98 days, 51 per cent higher than in January 2020, according to LonRes, a property data company.
Stock levels are up 50 per cent from this time last year in Marylebone, Mayfair and Bayswater, according to Martin Bikhit, the managing director of Berkshire Hathaway HomeServices Kay & Co estate agency. “There has been a regular ‘drip-feed’ of Airbnb properties making their way on to the rental markets,” he says. “Landlords who have had to shoulder their own mortgages for many months are simply not in a financial position to see their flats empty any longer.”
Certain areas have borne the brunt of the London exodus. In Camden average rents fell 20 per cent between September 2019 and September 2020, and in the City of London they fell 12.59 per cent, according to Ascend Properties. “We have found that rents have dropped by 15 to 25 per cent in Bloomsbury,” says Megan Cutforth, the manager of the local branch of Greater London Properties. “It is usually a student area, so it has been greatly affected.”
Areas with offices have also been hit hard. “Canary Wharf is a bloodbath,” says Peter Murphy, a director of Right Now Residential, a central London lettings agency. “Rents have fallen by 15 to 30 per cent. There are a lot of big buildings standing empty. It is very dependent on internationals coming there for work. It is a similar story in the City. Rents in Old Street have fallen off a cliff.”
Posh areas such as Knightsbridge and South Kensington are also fertile hunting grounds, with wealthy Middle Easterners staying away. The result is that landlords are willing to make deals, and renters’ lifestyles are being transformed, says Murphy, whose average tenant age has fallen from 31 to 27 in six months, and their income from £53,901 to £31,840. “One of our clients is a single woman who was renting a very small studio in London Bridge but was able to trade up to a penthouse in Greenwich. Her previous rent for the studio was £1,500 a month; her new rent for the penthouse is £1,350.”
However, the rich pickings may not last long if vaccines prove to be successful. And more and more savvy renters are competing for deals: in Knight Frank’s Canary Wharf offices viewings were up 124 per cent in the final quarter of 2020 compared to the same period in 2019.
Don’t be discouraged if you look on a property portal and see that some flats in Canary Wharf being marketed for pre-Covid prices, Murphy says. “They are bigger landlords, institutional landlords — they can’t lower the marketing price because they have funds to report to, and if you take 10 per cent off rental values that will take 10 per cent off property value. So call the agent and see if the landlord is open [to negotiation]. If it is on for £2,000 a month and has been on for a couple of months, they might take £1,700 or £1,800.”
Offer to sign a two or three-year deal and ask for the annual rent review clause not to be included in the contract. If a landlord balks, offer to pay six months in advance, or even 12 months — gold dust for landlords worried about void periods.
Even though there is a greater selection now, good-value flats are going quickly, says Murphy, who advises you to register with an agent, set up alerts on property portals and make inquiries right away when something catches your eye. “Get your reference information prepared in advance. We will speak to landlords and employers — we will ask about income, we expect to see incomes that are 2.5 to 3 times the rent. We also use better technology to check references, so the same stuff that comes up on your credit ratings will now come up for tenants.”
And be prepared to move fast — if you are ready to move in tomorrow, rather than in two months, landlords are more likely to accept a deal.
Here are some of the best discounts in the capital.
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