London-focussed lettings agency Benham and Reeves says renters who secured bargain properties during the pandemic now face huge rent rises when they renew.
Average rents are as high as £1,700 more per year in some boroughs.
Benham and Reeves’ research shows that in the City of London, for example, rents plummeted 24.3 per cent during part of the pandemic – typical rents became £552 per month more affordable, a saving of £6,624 per year.
Camden (down 17.5 per cent), Westminster (down 15.7 per cent) and Islington (down 10.4 per cent) also saw some of the largest declines in the average monthly cost of renting during the time that tenant evictions were banned.
Since the end of the tenant eviction ban, the average London rent has crept up by 1.2 per cent. But this jump in the cost of renting is far more pronounced in the City of London – an 8.2 per cent rise, adding £1,704 more per year to rent.
Kingston has also seen one of the largest increases at 7.1 per cent, meaning the cost of renting is now £1,206 more expensive, with Camden (£1,230) and Richmond (£1,110) also seeing the annual cost of renting climb by over £1,000 since the end of the tenant eviction ban.
“London’s landlords have been hit particularly hard by the pandemic influence on the rental market, with many suffering from a prolonged period of lost rental income, either due to extended void periods, or due to tenants unable to pay their way” suggests the director of Benham and Reeves, Marc von Grundherr.
He continues: “The London rental market is now rebounding at an alarming rate which is great news for this beleaguered segment of buy-to-let investors and this is being driven by the return of the professional and student tenant, as well as a strong uplift in international interest.
“However, despite what may seem like some drastic increases in rental values in recent months, we’re yet to see the market return to full, pre-pandemic health. This is down to the fact that rental values fell by as much as 25 per cent in some areas of the market during the ban on tenant evictions alone. Once this was lifted, many new and existing tenants were able to secure rental properties at rock bottom rates.
“Now that demand has returned, these rates are no longer on offer and so many tenants are now finding that when they come to renew, the cost of the same property is substantially higher.
“But with so little stock to choose from in such a competitive space, many are biting the bullet and staying put, realising that despite this uplift, the cost of their rent is in line with actual market values.
“The result of this has been some huge increases in rental value growth, albeit this ‘growth’ is simply a return towards pre-pandemic market conditions. The silver lining for the capital’s landlords is that they should now be able to recoup their losses over time.”