A new lettings market snapshot from Rightmove suggests that asking rents in some major city centres have seen annual falls up to 12 per cent as some tenants move to suburbs.
Inner London has been hardest hit with average asking rents falling annually by 12.4 per cent, followed by Edinburgh city centre down 10.0 per cent and Manchester city centre down 5.3 per cent.
The number of rental properties on Rightmove more than doubled in some city centres, with the biggest jumps in Leeds (up a huge 179 per cent), Inner London and Nottingham (both up 139 per cent)
Outside London, asking rents rose in the final quarter of last year for the first time, leading to another record of £972 per month, and London is the only region recording an annual fall, down by 6.4 per cent.
Rightmove’s study looked specifically at the centres of 10 of the biggest cities around the UK; in all there has been a shift upwards in the number of tenants who currently live in a city enquiring about properties outside.
In Inner London, 53 per cent of renters living there enquired about a property outside the city, up from 45 per cent in the same period in 2019. In Edinburgh, the number of renters enquiring about leaving the city has risen from 29 to 37 per cent.
More tenants seeking the suburbs as well as some short-lets changing to long-lets has led to a significant increase in the number of properties available for rent in these city centres.
In five of the cities stock is at least double what it was this time last year. This is very different to the national picture where available stock is down by nine per cent compared to this time last year.
There are some city centres where asking rents are still rising annually, including Bristol and Liverpool (both up 2.0 per cent) athough both of these are below the national average of 3.7 per cent.
The number of prospective tenants contacting agents nationally is currently up by 27 per cent compared to January last year, and asking rents outside London are at a new record of £972 per calendar month, up by 3.7 per cent annually.
This is also the first time since Rightmove started recording this data back in 2011 that asking rents increased in the final quarter of the calendar year.
In the capital, the annual rate started to fall in the third quarter of 2020, and has fallen further, with asking rents now 6.4 per cent lower than in Q4 2019, although this is driven by Inner London being down 12.4 per cent with Outer London showing not change.
Overall in London, demand so far in January is still up by 8.0 per cent compared to the same period last year.
Rightmove’s director of property data Tim Bannister says: ”The price premium that many tenants are usually willing to pay to have the vibrancy of a city centre on their doorstep has been tempered for now.
“This brings a challenge for some landlords but also an opportunity for tenants who may be able to make a longer term decision and move into a city centre now, perhaps on a two year tenancy agreement, at a more attractive rent than this time last year.”
He says he has “no doubt” that higher rents will return once life goes back to some form of normality, but it will be the city centre properties with gardens and balconies that will be able to command the biggest premiums.
“Outside city centres it’s a very different picture, with agents reporting extremely busy markets and rising rents. Available stock is lower than the usual level we would see at this time of year, and demand is higher, leading to a much better outlook for those landlords in the suburbs and in smaller towns and villages” concludes Bannister.