The reversal of fortunes in the capital continued for the fourth quarter in a row as SpareRoom’s latest analysis reveals average room rents in London fell 8% from Â£ 771 in Q1 2020 to Â£ 706 in Q1 2021.
According to the latest figures, room rents in every area of ââLondon have fallen year over year, with central west London recording the largest decline (-20%), followed by central east (- 17%) and the west (-11%). ).
The London postcodes where room rents have fallen the most are SW1 (Westminster / Belgravia / Pimlico) -25%, W1 (West End / Soho) -23% and W8 (Holland Park) -21%, from 1117 Â£ to Â£ 1,169 and Â£ 1,144 to Â£ 833, Â£ 904 and Â£ 900 respectively.
The negative trend in the capital continues to push down national average rents, although several parts of the UK are experiencing rent increases. Excluding London, UK rents are up 1% year-on-year. In fact, the only area of ââthe UK outside of London to experience a drop in room rents was the West Midlands, which fell 1%.
Along with the sustained decline in rents in London, SpareRoom research shows a marked drop in demand relative to rental supply in the capital since the start of the pandemic. Of the UK’s 50 largest cities, London saw the biggest drop in demand relative to supply, down 23% year-on-year. In particular, central-east London suffered the largest decline, by almost half (-42%), followed by south-east (-40%) and central-west London (-40%).
However, the loss of London is a gain elsewhere. Ipswich saw the biggest increase in demand relative to supply, up 81% year-on-year. This was closely followed by Poole and Blackpool, up 71% and 59% respectively. Nonetheless, a drop in demand relative to supply is not just in London, with Cambridge (-17%), Aberdeen (-14%), Belfast (-13%) and York (-13%) joining all of London (- 23%) to suffer sharp declines.
The cheapest areas to rent a room in London remain SE2 / Abbey Wood (Â£ 531) and E6 / East Ham (Â£ 545), with E12 / Manor Park (Â£ 547) also joining the list in Q1 2021. At the other At the end of the scale, the most expensive place to rent a room in the capital was SW7 (South Kensington / Knightsbridge), with an average monthly rent of Â£ 1,082. Followed by WC2 (Strand / Holborn) at Â£ 989 and SW3 (Chelsea) at Â£ 971.
East London remains London’s most popular postcode with the top two places going to E14 (Canary Wharf / Docklands) and E1 (Shoreditch / Whitechapel), followed by the N1 from North London (Angel / Islington / Canonbury).
Across all parts of the UK, East Anglia and the South West saw the largest increase in year-over-year room rents, rising 4%. These regions are closely followed by the East Midlands, Northern Ireland and Yorkshire and Humberside, all up 3%.
In the first quarter of 2021, the most expensive areas to rent outside the capital were Twickenham (Â£ 698), Kingston upon Thames (Â£ 696) and Barnet (Â£ 642) – all close to the city. Meanwhile, Bootle, Sunderland and Londonderry were the cheapest areas to rent a room in the UK at Â£ 335, Â£ 341 and Â£ 347 respectively.
Matt Hutchinson, Director of SpareRoom, comments: âA year after the start of the pandemic, there is still no indication that the London market is recovering. However, as the vaccine rollout continues and the UK begins to open up more, demand may well be pent up ready to hit the market this summer.
It remains to be seen where people choose to live after the pandemic. The increase in remote working may mean other parts of the UK continue to experience increased demand. they will mean the return of a large number of jobs. As we know, work is one of the main drivers in the rental market.