Tenants abandon London and flee to suburbs in search of more space

0
32


A new desire for space after the foreclosure is driving a ‘race to the suburbs’ in the rental market as tenants rush to expand, new research shows.The coronavirus has changed the priorities of tenants: many of those who work from home want to leave cities like London to live in less built-up areas and apartments to houses with more rooms.

Since the foreclosure was made easier, 34% of tenants who have moved have chosen a property with at least one additional bedroom, according to real estate agency Hamptons International. In the first three months of 2020, the share was only 25%.

Across the country, the average upsizer increased their rental bill by 23 pc – or an additional £ 149 per month – to add 1.4 rooms to their home.

Renters are also moving out of cities, as demands in urban areas fell 23% in August. In small towns and suburbs, however, the numbers rose 1%. Aneisha Beveridge of the Hamptons said it represented “a race to the suburbs.”

A quarter of rental moves between May and August were from apartment to house. In the first three months of the year, the share was only 16%.

The trend is most pronounced in the south-east. Here, 47% of renters added at least one room when they moved, paying an extra £ 266 per month.

The disproportionate growth here is likely due to relocations from the capital. Two-thirds of London renters who chose to expand in August have chosen to move out of the city and move to cheaper places where they can get more space for their money.

The outgoing movement has contributed to further rent cuts in the capital. The monthly price of newly let properties fell 3.9% year over year in August to £ 1,775.

Rents have been falling steadily in London since March, due to the influx of short-term rentals into the market following the tourism slump and a drop in demand from tenants for homes close to their offices.

The falls are so pronounced that tenants now have bargaining power. In August, tenants in London who raised their bills actually reduced their bills by 4%. They paid £ 86 less to have at least one more room.

The number of homes available for rent in the capital rose 34% year on year in August. Across Britain, that number has fallen by 11%. In the Northeast, the drop was 45%.

The imbalance between supply and demand means that outside the capital, newly rented rents rose 2% in August.

In Wales and the South West, price growth was 3.9% and 3.6% respectively.

“As the premium on green spaces increases each month, booming tenants have generally stayed on the outskirts of cities they know rather than completely vacate,” Ms. Beveridge said.

As in the sales market, it is the wealthier tenants who lead the rental market. Aggregate tenant demand is dropping across the country, Ms Beveridge said.

LEAVE A REPLY

Please enter your comment!
Please enter your name here