博鱼体育集团

While property market headlines have been dominated by the 鈥渞ural exodus鈥� happening in the sales market during the pandemic, a shift in the other direction has been taking place in the lettings market.

Last month we showed how more people are moving to Canary Wharf due to cheaper rents and the ability to walk to work. The same effect has been seen more widely across central London as people take advantage of the benefits of living in zone 1.

It underlines the strength of demand for urban living when the price is right, suggesting there are natural economic limits to the 鈥渆scape to the country鈥� story. As we highlighted in November, asking prices for large central London flats had fallen by more than any other property type, which may tempt investors able to see through the short-term fog of Covid-19.

鈥淭here has always been a group of people living on the periphery of central London who couldn鈥檛 afford to go in any further,鈥� said David Mumby, head of Prime Central London lettings at 博鱼体育集团 Frank. 鈥淭hat has changed and we鈥檙e seeing movement from areas including Wandsworth and as far away as Croydon into Chelsea and South Kensington.

鈥淭his fundamental reset of rental values means there has almost never been a more affordable time to rent in central London,鈥� said David. 鈥淭he allure of PCL hasn鈥檛 gone away and tenants are thinking beyond lockdown. People working from home like the idea of being close to central London amenities and parks. They are taking advantage while this window of opportunity stays open. Once international travel resumes it will start to close.鈥�

Average rents fell by 13% in prime central London in the year to January, which took them back to levels last seen at the end of 2009 during the global financial crisis.

There are two primary reasons for this, both of which are temporary. First, a glut of short-let properties has appeared on the long-let market due to successive lockdowns. Second, demand from overseas students and corporate tenants has fallen away.

As a result, more tenants from outside zone 1 are able to move to central locations.

The number of new prospective tenants registering in prime central London who came from outside the area was 35% between June and December 2020, up from 26% in the same period in 2019. Furthermore, their average distance from the boundary of PCL more than doubled to 3.1 miles from 1.5 miles over the same period.

In a mirror image of what has happened in the sales market, falling rents have driven demand for central London when compared against south-west London and the Home Counties, as the above chart shows. Areas including Wimbledon and Richmond have seen more modest single-digit rent declines as the stronger sales market has meant less supply transferring to the lettings market.

While the number of viewings in PCL rose 24% in the year to January 2021 versus the previous 12 months, there was a 35% decline in south-west London and the Home Counties. New tenant registrations were up 8% in the same period in PCL while the number declined 15% in south-west London.