Landlords slash the rent but for how long?
Covid-19 has caused a "change in lifestyle" say estate agents
26 November, 2020 — By Bronwen Weatherby
Experts warn cut-price offers could reverse next year (Credit: Tumisu from Pixabay)
LANDLORDS have begun lowering rents on some properties by as much as £400 a month but private tenants have been warned that the deals might not last long.
Property specialists say a “shift in lifestyles” brought on by the pandemic has seen rents on flats in some of Camden’s most lucrative areas fall for the first time in years.
Landlords are afraid that their flats could stand empty otherwise and have fewer options on the Airbnb short-let market because of the drop in travel and tourism.
And short-term trends suggest tenants who could afford the higher rents are now looking for more space to work from home or have questioned the need to stay in expensive areas of central London.
Jake Perkins, of Hotblack Desiato letting agents in Parkway, Camden Town, said: “Post-lockdown there was a flurry of activity because everything had been on hold for three months and when everything opened up a lot of people, especially couples, who had been living in one-bedroom flats now wanted a two-bed or somewhere with an outside terrace or garden.”
He added: “There’s been a real shift in lifestyles with people being more aware of their surroundings. They’re not only desiring a bigger place, they want somewhere that’s got Victorian architecture with character, that’s in an area with a sense of community perhaps, and closer to nice walks and bicycle rides.
“That’s also why we’ve seen higher-value apartments in big modern developments, such as in King’s Cross take a hit.”
Some rentals have fallen in price by £300 or £400 a month since the start of the year. But there are warnings for people signing up.
Portia Msimang, project coordinator at Renters’ Rights London, said: “Although I’ve seen reports that the cost of renting has fallen in recent months, they still have a long way to fall to reach 33 per cent of income, in line with the United Nations definition of ‘adequate housing’.
“Most workers on furlough are living on 80 per cent of their pre-Covid earnings and so are now paying an even higher proportion of their income to meet the rent.”
Robert Taylor, from the Camden Federation of Private Tenants, said: “It’s a bit of a mixed picture at the moment but what we do know is that many flats are being left empty because many people are unwilling or unable to pay the high rents demanded for those places before and so landlords are having to reduce their price.
“People who are already in tenancy agreements might still be too scared to negotiate reductions with their landlords and for many the price of moving isn’t affordable.
“Some landlords might not be in the position to be flexible while others will just hold tight under the assumption that, because this is Camden, rents will eventually go back up.”
He added: “There is no doubt though that the attraction of living in high-rent areas, which before the crisis were hubs of activity, nightlife and socialising have lost their appeal to some and it’s caused people to ask themselves why they are paying such high rent for somewhere so small.”
The cut-price offers could easily be reversed next year, he warned, and tenants taking advantage of lower rents might find themselves moving again.
“It’s early to say what the long-term impact of this is going to be but a word of caution: this could be a temporary blip so if you decide to move be aware that there’s every likelihood landlords are going to want to hike up prices again once everything starts to pick up again,” said Mr Taylor.
“The other thing is Airbnb properties that have now been converted to more long-term tenancies, which means there are even more properties in supply on the market perhaps than demand.
“Many landlords were flipping properties to Airbnb after finding out how lucrative it is. It was having a huge impact on the area, but the coronavirus seems to have switched the terrain again.”