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Tenants hunt for bargains as City rents plunge by 19%
Sri Carmichael, Consumer Affairs Reporter03.07.09
The banking meltdown has seen rents in the City fall by 19 per cent over the past year, new figures show.
The collapse of the financial sector has crushed demand for pieds-à-terre in the Square Mile, meaning those still flat hunting can negotiate far better deals with landlords.
The average City rent is now £916 a month, still the highest in the capital. A year ago it was £1,217. The figures are also good news for tenants across London with rents plummeting faster than anywhere else in the UK, according
to flat search website SpareRoom.co.uk.
They dropped 1.7 per cent between April and June to an average £544 per month, taking the annual fall to 2.9 per cent.
Other areas hit hard by white-collar unemployment have also seen rents become far more affordable in the past 12 months.
In Richmond the average rent fell 10.4 per cent in the last year, while in Westminster the fall was 10.2 per cent.
Another reason landlords across 80 per cent of all boroughs have struggled to let out homes for as much as a year is because immigration has fallen, dampening demand.
Some households have also taken in lodgers to save money, increasing supply and competition which pushes down the cost of renting.
The recession has led many foreigners to alter their view of London as a destination where they can make a good living.
The number of overseas room-seekers has dropped by a quarter in the last 12 months, SpareRoom.co.uk said.
Inner London boroughs have seen rents fall by more than outer boroughs.
Matt Hutchinson, director of research at SpareRoom.co.uk, said: “London rents have taken a serious blow in the past year, making it an ideal time for tenants on the hunt for a bargain.
“The financial crisis has claimed count less City high-fliers and falling demand has seen rents in the borough plunge.
“Other wealthy boroughs such as Westminster and Richmond upon Thames have also been badly hit in the past year.”
He added: “There's been a huge increase in supply over the past 12 months, which has forced down rents.
Existing flatshares have been renting out additional rooms to save money and the number of households taking in a lodger has also grown dramatically.”
But he said rents in London could rise again in the next few months because the supply of rooms is levelling off.
There is also growing demand from people still unable to buy a house or trying to save for a deposit on a property.
Reader views (3)
Funny how council rents have risen by 5%?
I guess its one law for the lower classes, and another law for the rest.
- Mickinlondon, london.
With mortgage interest rates at an all time low why should'nt rents be reduced? .The city, in Tower Hamlets also has greedy landlords charging the highest returns on the cheapest properties in London.
The landlord compulsory registration scheme will now also mean that many rouge landlords who avoid paying tax on their lie-to-bet properties will be caught, and their properties seized!
The falling rents is further proof that there is an excess of supply of available properties.
- Sam, London
About time!!! the rents in this city are so astronomically over-priced that I hope this recession lasts that little bit longer to allow for decent affordable living and not the extortionate rents of previous years!
- Ali Sichilongo, London
