London’s powerhouse private rental market has doubled in size since 2002. It now accounts for around 4.5 million households; many of which are in the same boat: they would love to buy their own home in the capital, but notoriously high property prices prevent them from doing so. This – together with the transient nature of this world-class city – has created a saturated market.
Prior to the rapid spread of Covid-19, it seemed almost unthinkable that anything could check the rental market’s stride. Then along came the unprecedented global health crisis and the lockdown restrictions required to control it, which brought the nation to a virtual standstill.
So, how has the fallout from the pandemic weighed on the London rental market in recent weeks? And are there any opportunities that have emerged from this uncertain period?
Here is a run down of what we think are the benefits and drawbacks for people looking to move to London.
The drawbacks when looking for a flat or house in London
Sudden fall in the supply of property – the London rental market went from fluid to static almost overnight, after the government announced draconian lockdown restrictions in March. The pressure the measures put on household incomes caused people to postpone plans to move, strangling the supply of property in the rental market.
Cancelled viewings – if a landlord wants to market a property but the current tenants are in a high-risk Covid-19 category or simply refuse to come into contact with people from outside their household, viewings won’t be possible.
Limited number of people per viewing – despite the gradual easing of lockdown restrictions, government guidelines say that ‘only those in your immediate household should attend’. To ensure social distancing practices are adhered to, agents are restricting the number of people who attend a viewing. So for example children are not allowed to attend viewings.
The opportunities when looking to move to London
Less competition between tenants – while property might be in short supply because people are staying put, demand has for rented dwellings has also fallen as a result. Therefore, there will be fewer people than usual competing for properties you like the look of, which might also give you extra bargaining power when it comes to the rental price.
Virtual viewings – according to government guidelines: ‘initial viewings should be done virtually wherever this is possible, physical viewings should only be conducted where buyers are seriously considering making an offer on a property’. This is the biggest advantage in our opinion. Whereas before the lockdown, property videos were reserved for the high-price part of the market, if at all, these are becoming more and more common, to the benefit of the tenant. Videos are a lot more realistic than photos, giving a much better perspective to the potential tenant.