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Mortgage squeeze pushes up rents but London prices tumble – Zoopla

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  • 10/11/2020
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Mortgage squeeze pushes up rents but London prices tumble – Zoopla
Rents in London have dropped by 5.2 per cent annually, but outside of the capital tenants are paying more, analysis has shown.

 

UK rents, excluding London, were up by 1.7 per cent to an average £744 pcm, according to property site Zoopla.

The squeeze on mortgage lending means more people staying in the rental sector when they may otherwise have bought, the property site said.

Demand from tenants is up 20 per cent year-on-year whereas supply into the rental market is flat.

English cities with the biggest increase in demand were Newcastle, up 3.5 per cent annually, Bristol, up 3.1 per cent, and Sheffield up 2.6 per cent.

In some cities there has been a drop, including Coventry down 2.5 per cent annually and Reading down 1.8 per cent annually.

The search for space driven by the pandemic means houses are letting more quickly than flats in most regions.

 

Mass exodus from London?

In the capital average rents remain significantly higher at £1,596 than the UK average, despite the recent drop.

And a large-scale move from London is probably an overstatement as most Londoners are looking for rental property within the capital, the property site found.

An average single UK renter now spends around a third of salary on rent, and the average time to let a property is 17 days.

Zoopla head of research Gráinne Gilmore said:  “The split in the rental market caused by Covid-19 has now crystallised and we are seeing the two-speed market firmly entrenched.

“For most of the UK, the demand-supply gap is underpinning moderate levels of rental growth. We haven’t seen the exodus of students from cities and, as more people are staying in the rental market given the squeeze on mortgage lending, higher levels of demand will continue to underpin rents.

“At the same time however, muted earnings growth will start to limit the headroom for rental growth in some markets.

“The search for additional space, both indoor and outdoor, within the rental sector is also set to continue as the country goes through additional periods of lockdown.”

 

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