Private sector tenants are leaving London in response to the Covid-19 pandemic, changing the rental market fundamentally.
According to new research, landlords letting properties in London were the only ones in the country to report that tenant demand had fallen more than it increased.
A survey of National Residential Landlords Association members, conducted by the research consultancy BVA-BDRC, found that 56 per of landlords with properties in Central London saw tenant demand fall in the first quarter of 2021 compared to the same period in 2020.
Just 12 per cent reported that demand had increased.
In Outer London, 45 per cent of landlords reported demand having fallen, with 33 per cent saying it had increased.
NRLA chief executive Ben Beadle says: “The pandemic has seen a significant shift in where tenants want to rent, with the trend towards home working making inner cities, especially London, far less desirable.
“This poses significant challenges in determining where to invest to meet demand.
“Investors will no doubt be waiting for the market to settle, and the full roadmap out of lockdown to be realised, before making major decisions about where to invest. This will be particularly important as employers make decisions in the coming months about future working patterns.”
Elsewhere, tenant demand was strongest in Wales, with 57 per cent of landlords renting property there having reported an increase over the same period, compared to just two per cent who registered a fall in demand.
This was followed by landlords renting property in the South West, where 53 per cent reported an increase in demand, compared to 13 per cent who registered a fall.
Overall, across England and Wales, 31 per cent of landlords reported tenant demand for properties had increased in the first quarter of 2021. This has recovered from the 14 per cent of landlords who reported tenant demand having increased in the second quarter of 2020 in the aftermath of the first lockdown.
Nationally, whilst seven per cent of landlords had brought property in the first three months, the same proportion had sold property.
Central and Outer London continue to be the only regions where a significant proportion of landlords reported that rents are falling (46 per cent and 27 per cent respectively).
Landlords with property in London were also more likely to have reduced rents across their own portfolio in 2020 (46 per cent reduced them in Central London, 26 per cent who reduced them in Outer London).
Across the country, 32 per cent of landlords had experience of properties being void in the first quarter of 2021, with the average void period being 102 days.