London rents climbed for the first time for over a year during Q1 2021 —increasing by £8 or 0.61% to £1,325, suggesting the city’s rental market has started to stabilise during the coronavirus pandemic, according to The Deposit Protection Service (The DPS).
By comparison, rents across the North East, traditionally the most affordable UK region to rent, increased by £37 (7.12%) to £557 the same quarter, largely owing to rents on flats going up by £40 (7.81%) to £552, said the UK’s largest protector of deposits.
The DPS’s quarterly Rent Index shows overall resilience in the UK’s rental market during Q1 2021, with significant increases in Tyne and Wear up £32 (5.78%) to £586 and Merseyside up £31 (5.64%) to £581, while rents in Bristol fell £17 (-1.77%) from £960 to £943 and in Luton by £19 (-2.3%) to £785.
Despite a pandemic flight from cities during Q3 2020, rents across all property types increased during Q1 2021, as well as overall between Q1 2020 and Q1 2021, said the organisation.
|Property Type||Q1 2021||Q4 2020||2021 Q1 vs 2020 Q4 %||Q1 2020||2021 Q1 vs 2020 Q 1 % change|
Matt Trevett, Managing Director at The DPS, said:
“The stabilisation of rents in London suggests that the tenants who have decided to leave the city during the pandemic for work or space reasons have already done so, perhaps to live in cheaper areas or to move nearer to, or back in with, family.”
“We’re aware of significant commitment from media and government organisations to invest long-term in the North, including a number of transport and infrastructure projects, which could well be driving the demand we’re seeing in the region for property.”
“There remains strong demand for all types of properties, and rents overall across the UK seem to be withstanding pandemic conditions.”
UK average rents increased by £8 (1.01%) to £800 between Q4 2020 and Q1 2021 and increased by £25 (3.23%) compared with Q1 2020, with rents falling slightly in Scotland by £3 (-0.46%) to £649.
The North East also experienced the largest (£40 or 7.74%) rent increase between Q1 2020 and Q1 2021, said the organisation.
Average London rents remained static during Q1 and Q2 last year before falling by 1.71% in Q3 2020 to £1,322 and by 0.38% in Q4 2020 to £1,317, said The DPS.
Tenants pay on average 30.75% of their annual wage on rent, added the organisation.
|Region||Average rent Q1 2021||£ Change since Q4 2020||% change since Q1 2020|