The firm analysed rental market data looking at the average rental cost and how it has changed between 2020 and 2019 and found that across England, Covid has caused a marginal reduction in rents, with the average cost per month falling by -0.8%. A decline that will be welcomed by tenants who have seen consistent increases in rental prices in previous years, and more recently, may have seen their ability to afford this rent decline due to the pandemic.
Of course, this decline has been more pronounced in some regions, with London, in particular, suffering from falling demand due to the growing trend of remote working.
Rental prices in the capital fell -3.4% over the last year, with the East of England and South East also seeing some of the largest declines at 2.4% and 1.6% respectively.
Further analysis revealed that just Bournemouth has seen a larger decline than London; with the average monthly rent falling -4.4% in 2020. Bristol (-3.3%), Nottingham (-1.7%) and Portsmouth (-1.1%) have also seen a decline when compared to 2019.
However, not everywhere has seen the cost of renting fall. The North East has seen the largest increase in the cost of renting of all regions in England with the average monthly rent up 3% in 2020.
This growth is being driven by Newcastle, where the annual cost of renting jumped a huge 16.6% during 2020. This is the largest increase of all major cities analysed by Keller Williams, with Leeds (5.7%) seeing the second-largest increase, followed by Birmingham (3.3%) and Manchester (2.9%).
Ben Taylor, CEO of Keller Williams UK, commented: “It’s been a strange year for the rental market and both tenants and landlords have faced challenges posed by the pandemic. The impact of Covid has been more pronounced across the less affordable regions of the rental market. This will have been largely due to lower demand, as well as being influenced by tenant affordability with many struggling financially due to job losses and furlough.
"However, while tenants have seen a welcome reduction in the cost of renting, these regions remain home to the most robust rental costs and this will reassure landlords. Many may have feared a far larger market collapse was on the cards and so far, this simply hasn’t been the case.
"In fact, in many areas, the cost of renting has actually climbed despite the wider backdrop of a pandemic.
"With the vaccine now being rolled out and hopefully some light at the end of the tunnel, we should see market uncertainty settle down considerably throughout the course of this year. Although based on how 2020 turned out, we will believe it when we see it.”
