London has seen its biggest drop in rental prices since spring last year, new data suggests.
A report by SpareRoom using data from the final quarter of 2020 found that room rents in the capital were 8 per cent lower on average than they were in the last quarter of 2019.
It comes as London’s population is falling for the first time in 30 years. Since coronavirus struck some 700,000 residents who were born overseas may have left the capital, government-funded organisation the Economic Statistics Centre of Excellence (ESCoE) estimates.
Earlier this month, PwC predicted that London’s population could fall by 300,000 this year, with reasons including an increase in home-working, fewer graduates moving to the city, fewer job vacancies and fewer people moving to the UK from abroad due to Covid-19 and Brexit.
The parts of London that have experienced the biggest fall in rents were normally-pricey central neighbourhoods. Of the 10 London postcodes which had seen the biggest drop in prices, eight were in travel zone one (the most central part of the city).
Only nine of London’s 120 postcodes saw an increase in rent compared with the same period in 2019, and these were all outside of zones one and two.
The postcode where rent had fallen the furthest year on year was EC3 (Aldgate), with prices down by an average of 26 per cent. Rents in SW1 (Westminster/Belgravia/Pimlico) were down 23 per cent and, in third, prices in EC2 (Bishopsgate/Cheapside) fell 21 per cent.
Here is the full list of where rents had fallen the most:
Meanwhile, rents further out of the city centre rose the most compared with 2019. The biggest jump in prices was in SE20 (Penge) and N12 (North Finchley), both up eight per cent. This was followed by E4 (Chingford), up five per cent, and SE7 (Charlton), up four per cent.
Here is the full list of where rents had risen the most:
The priciest place to rent a room in London continues to be EC4 (St Paul’s), where monthly rent is an average of £1,262, followed by SW7 (South Kensington / Knightsbridge) at £1,103 and SW3 (Chelsea) at £987.
SpareRoom’s director, Matt Hutchinson, said the figures showed the biggest fall in London room rents since spring with “no immediate sign of a recovery”.
He added: “The first national lockdown made people think twice about living in cities, especially London. With another lockdown now underway it’s hard to see that changing any time soon.”