London agency Chestertons is warning that it’s going to be “another difficult year for the lettings market” in 2021.
It says that both tenants and landlords are likely to remain under considerable financial pressure.
However, there are pros as well as cons, and Chestertons says there are four key points for agents and investors alike to consider.
Firstly., once Covid restrictions are removed “we anticipate at least a partial return to normal office working which will bring a rise in demand for rented accommodation”;
Secondly, a return to more normal life will also see the return of international students and corporate tenants;
Thirdly, Chestertons anticipates a worsening in affordability in the sales market which will drive more people to rent;
And fourthly, the number of properties to rent is likely to fall as struggling landlords sell properties and tenant demand picks up.
Against that backdrop, the agency says that the rate of rental decline across Greater London - a characteristic of 2020 - will slow in 2021 and rents will drop no more than two per cent.
“Thereafter, assuming the economy recovers as forecast we expect annual rents to resume growth and to settle into a level slightly above inflation” says the agency.