Average cost of renting a room in central London rebounds as roommates, students and wealthy families plan to return

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A room to rent in a huge shared flat in Kentish Town will cost £ 790 per month from mid-September. Call 020 8012 5217 (Rightmove)

Rents in London have stopped falling for the first time since the start of the pandemic, as young tenants return to the center of the capital.

While the desire to relocate, driven by the stamp duty holiday, has supported house prices at the height of the Covid-19 pandemic, rents have plummeted.

The cost of renting a room fell 4.7% in the capital in winter when the virus spread (to £ 692 per month) and as much as 13.4% in central London (to 739 £).

The capital’s expensive city center was hit hardest during the coronavirus crisis, as young tenants stuck telecommuting with roommates did not renew their rental contracts. Foreign students have also left.

New data released today by Hamptons shows the capital’s rental market has finally turned a corner. When the UK reopened last month, rents stabilized in Greater London, but rose 4.1% in Zones 1 and 2 during the year through July, raising the rent average rooms in these central areas at £ 803 per month.

“Many students and recent graduates, who are the biggest source of demand for room rentals in the capital, temporarily left London last year to return to live with their families during the closures,” said Aneisha Beveridge, head of residential research for Hamptons. “The UK’s reopening has brought many of these young tenants back to the capital to work, study and socialize. “

Landlords were forced to cut rents to compete with Airbnb properties which flooded the market due to lack of tourism, which also drove room rents down.

TABLE: AVERAGE MONTHLY ROOM RENTS IN LONDON

Month

Zone 1-2

Zone 3

Zone 4

Zone 5

Dec-20

£ 739

£ 677

£ 613

£ 624

January the 21st

£ 754

£ 678

£ 620

£ 625

Feb-21

£ 763

£ 695

£ 657

£ 622

Mar-21

£ 770

£ 693

£ 672

£ 614

Apr-21

£ 767

£ 699

£ 675

£ 628

May 21

£ 773

£ 692

£ 649

£ 625

June-21

£ 794

£ 682

£ 650

£ 633

Jul-21

£ 803

£ 693

£ 650

£ 620

Olivia McSweeney, Rental Manager at Rokstone Properties, said “It is getting harder and harder to negotiate cheaper rents and we are seeing several offers on the best homes. It will be a shock to some of those who will retreat how quickly the market has reversed ”.

McSweeney sees the return of international students to Marylebone (especially from China and Europe) who select homes via virtual visualization. They arrive and quarantine themselves on the property if required by law.

The market for corporate outsourcing is “still slow,” she continues, but there is some activity from Canadians and Russians returning to work in finance and technology.

Outdoor areas were less affected during the pandemic than indoor areas. They are more affordable and offer larger homes and gardens at a lower price.

Therefore, the decline in central rents relative to the resilience of external rents means that the cost differential between the two has narrowed. Those returning to rent in London will now find that the average rent for rooms in Zones 1 and 2 costs 16% more than a room in Zone 3, up from a 20% gap in July 2019.

Room rental in Zones 1 and 2 was at its highest level in recent years in August 2019 at £ 866. In July, the 4.1% increase brings the average cost to £ 803. In Zone 5, rents have fallen from a high of £ 634 in September 2020 to £ 620.

The rise in rents in central London is also due to wealthy families. “The luxury family housing market, which typically seeks properties with four to five bedrooms, has been strong as people found rental housing before the start of the school year,” said Arron Bart of Aston Chase.

Across the rest of the UK, rents rose in the first half of the pandemic until Christmas when they started to drop with the biggest monthly drop in June of 2.2%. They fell 0.5% again in July to £ 593 per month.

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