Landlords settling for lower rents as more shift from short to long-term lets

Increasing numbers of landlords have had to shift from short to long-term lets due to lockdown.

Analysis by Hamptons International found the reduced number of tourists and corporate relocations in Great Britain during the pandemic has caused landlords to look for tenants in the long-term rental market

This trend has mainly been concentrated around inner London, the agent said.

Between the easing of lockdown in late May and the end of July, more than one in 10 (12%) homes that came onto the rental market in central London had previously been let on a short-term basis.

Across the capital as a whole, the figure stood at 5.1% over the same period .

More than a third (37%) of homes in London which had previously been advertised on a short let basis are now being offered for long- term occupation, according to the research.

However, landlords switching from a short to a long-term let are also having to take a reduction in rent.

On average the change means a 35% cut in rental income, equating to £1,952 a month less, Hamptons International said.

Meanwhile, analysis of Countrywide branch activity by Hamptons International found rents in Great Britain remained flat during July.

Last month, the average cost of a newly let property fell slightly to £1,001 per month, 0.1% lower than the same month last year.

This is still a slight improvement on the 0.7% year-on-year fall recorded in June.

The research found the shift to long lets has brought more stock to the London market but there were 7% fewer homes available to rent across the country last month compared with the same period last year.

Aneisha Beveridge, head of research at Hamptons International, said: “For years there had been a steady stream of landlords moving from the long to the short let market in search of higher returns.

“However following lockdown and in the two months since late May, this shift has been completely reversed with growing numbers of landlords looking to secure longer-term tenants.

“This is particularly evident in urban tourist and corporate relocation hotspots, nowhere more so than central London.

“The gap between what’s happening in the rental market in inner London compared with the rest of the country has widened.

“While affordability pressures weigh on rental markets across the country, the lack of stock available is softening the blow.”

Region

Jul-19

Jul-20

YoY

Greater London

£1,832

£1,755

-4.2%

   Inner London

£2,553

£2,338

-8.4%

   Outer London

£1,695

£1,645

-2.9%

East of England

£957

£949

-0.8%

South East

£1,077

£1,073

-0.4%

South West

£832

£855

2.8%

Midlands

£690

£706

2.3%

North

£673

£678

0.7%

Wales

£669

£682

1.8%

Scotland

£672

£672

0.0%

Great Britain

£1,002

£1,001

-0.1%

 

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