The data from UK rental guarantor service, Housing Hand, has revealed the sharp drop in rents followed average rental values (compared to a year earlier) beginning to decline in June 2020, when rents dropped to 11% below their June 2019 level.
Rents have continued to fall in many areas ever since.
Jeremy Robinson, Group Managing Director, Housing Hand, comments: “We've seen average rents fall steadily for the past nine months. In big cities like London, where tenants have moved outward either because of fears over the pandemic or due to the fact that they no longer need to be near the office to work, this fall is even more pronounced.”
The last two months of the year are usually the low season for landlords and letting agents. By October 2020, rental values were 14% below their level a year earlier. As such, many slashed rents even further in order to try and entice tenants to move in.
Terry Mason, Group Operations Director, Housing Hand, comments: “As the pandemic continues to push people from city centres to their outskirts, rents in central areas are likely to drop even further. Not only are landlords and letting agents slashing prices in many areas, we're seeing an increasing number of rental schemes offering one or even two months' free rent in order to encourage tenants to sign on the dotted line. Again, this is particularly prevalent in city centres. It begs the question: how far will landlords and letting agents go to attract new tenants?”
The Covid-19 pandemic has certainly done much to turn the housing sector on its head, with the government racing to introduce new initiatives to keep the market ticking over despite the painful economic backdrop.
The eviction ban, in particular, has done much to protect tenants who can't pay their rent. Unfortunately, it has also left many landlords unable to pay their mortgages.
With rents now steadily declining in many areas, according to Housing Hand's figures, it seems that the misery is far from over for both landlords and letting agents as 2021 unfolds.
