Big city rents are dropping by up to 45 per cent as swathes of tenants no longer have to live near their workplaces.
A Zoopla report last week said average rents in London are now 5.2 per cent lower than they were a year ago – while those in Birmingham, Manchester and Edinburgh are also dropping.
Roughly one in three flats to let in Manchester have seen a reduction, with a one-bedroom flat that was listed at £925 per month at the start of September now available for £825.
Some of the more drastic cuts include a two-bedroom flat in central London’s Baker Street which is down from £4,312 a month in May to £2,600 last month, while rent on a four bedroom flat around Bloomsbury dropped from £3,476 in June to £2,210, the Times reports.
The Zoopla report said: ‘The rental declines in the capital reflect the changing picture on working and commuting patterns and tourism.
A Zoopla report last week said average rents in London are now 5.2 per cent lower than they were a year ago. Pictured is a street in Notting Hill in west London
‘At the start of lockdown there was a shift from short lets to long lets, especially in the centre of the city, pushing up supply in the sector which is still being absorbed.’
But, the report added, the lettings market is seeing rents outside the largest cities still rising, and even within those cities there remains variation depending on pressures of the market.
Chris Norris, of the National Residential Landlords Association, said: ‘If you always rented a small space at premium in order to be close to work but now no longer need to be in the office, it is a rational choice to get more space a bit further out.’
Larger houses with gardens in outer boroughs are in demand.
Zoopla says that average British rent outside of London is £744 per month – a 1.7 per cent rise from last year.
Last month data revealed that the London rental market had been rocked by the coronavirus crisis with prices dropping by up to a third over the year.
Properties in postcode EC3, which covers Aldgate in Zone 1, were shown to have been most affected, according to the price index by SpareRoom. Rooms were 34 per cent cheaper to rent compared to the same time last year, dropping from £1,244 to £824.
The area is in the heart of east London and boasts good transport links to the City and other professional hubs which have become less desirable with the rise of remote working.
Data from last month showed prices dropping by up to a third over the previous 12 months. Pictured, a map illustrating the postcodes that have seen the biggest decrease in rental prices since the third quarter of 2019
Postcode W9, which covers parts of Maida Vale and Paddington, has seen the second biggest rent price drop (20 per cent), followed by SW1 (17 per cent), which covers Westminster, Belgravia and Pimlico.
The reverse of the trend was seen at the other end of the index, with suburban parts of London seeing the biggest growth in rent.
SE28 (Thamesmead) had seen the biggest rise with a 10 per cent increase from £559 to £613, followed by E4 (Chingford), which had grown 7 per cent from £569 to £610.
Matt Hutchinson, director at SpareRoom, noted: ‘Once again, London dominates the headlines in terms of falling rents, and it’s generally the most expensive neighbourhoods that are worst affected.
‘With so many young renters leaving the Capital, either to find cheaper rents, to move with family, or to leave the UK altogether, it’s hard to know when, or even if, London will regain the appeal it had before the pandemic.
‘What we’re seeing might just be a temporary shift in the rental market, or it may be the start of the UK’s rental map being redrawn permanently.
‘Even if young renters do return to the capital in their previous numbers, affordability will be their absolute top priority, in a city that already had an affordability crisis coming into this.’
SpareRoom’s Quarterly Rental Index compares data from Q3 2020 with Q3 2019.
It incorporates data – includes average rents and supply – from over 500,000 room ads in shared accommodation across the UK.