Rental growth falls in London but rises across the rest of the UK
Rents in London have fallen by 3% since the start of the year, according to Zoopla, and a decline of up to 5% is expected by the end of 2020.
However, it’s a different picture across the rest of the UK, with annual rental growth up 1.1% in June 2020, and expected to be at 1% by the end of the year.
Plus, when you exclude London from the UK figures, annual growth shoots up to 2.2%.
The property portal said a two-speed market has emerged between London and the rest of the UK, due to weaker demand and rising supply in the capital, in contrast to the regions.
The rise of homeworking at many firms, with a slow return to offices over the rest of the year, signal that demand for rental property is likely to remain subdued in London, combined with a decline in international travel.
Edinburgh is the other notable exception to the rental growth trend and has also seen a marked slowdown in rental growth to 0.2% over the past year. This comes as a result of reduced tourism and policy changes impacting landlords and the supply of property.
Gráinne Gilmore, head of research at Zoopla, said: “The future path of annual rental growth will be determined largely by the economic outlook, especially the rise in unemployment and the future path of average earnings.
“However, as new rental supply continues to catch up with demand levels, we could see further softening of headline rental growth by the end of the year, although there will be some areas of outperformance.
“Uncertainty continues over how any further outbreaks of COVID will impact the resumption of office life, student life and tourism, and this uncertainty will impact demand in some markets during the rest of the year.”