5 Things Changed About London Rental Market After Covid-19

5 Things Changed About London Rental Market After Covid-19

When the Covid pandemic happened, it affected everything. From industries and offices shutting down, to Londoners spending all day going from one Zoom meeting to another, everything we were used to changed.

London’s rental market was not left out as some new trends have emerged. This article looks at five things about the London rental market that has changed since the pandemic started.

Pricing

Average prices of houses have shot up by 13 per cent since the lockdown started, a run that is the fastest since 2016. This rise is in contrast to the 10 per cent loss in GDP the nation experienced.

This opposite movement in growth is highly usual, as the housing market usually follows the direction the GDP goes. For instance, during the global financial crisis of 2008, housing prices fell by 17.8 per cent as many homeowners scrambled to sell.

What has baffled watchers is how the prices rose when many families left the capital city, tourism came to a standstill, businesses closed down, etc. That is probably one of the wonders of the pandemic, right?

Home modification

You would think, during a period of job losses and nationwide despondence, home improvement would come to a halt. But that was not the case. The lockdown during the pandemic moved people to take stock of their living conditions and decide to splurge on improving their surroundings. This was bound to happen as more people worked from home and were forced to spend more hours in their apartments.

According to reporting by Heal, about 69 per cent of Britain’s households spent up to £5,000 on home improvements during the pandemic. This involved homeowners building fire pits, garden furniture, and hot tubs as they faced the prospect of a summer of home entertainment. Speaking of hot tubs, home insurance that included hot tubs nearly tripled in 2020.

Safe to say Londoners gained a new appreciation for their living quarters during the pandemic?

Home prices

One of the things many homeowners might have wondered about is if their home has reduced or increased in price. For a personal answer, some trends have emerged that will affect how much a particular house might fetch on the market today.

For example, houses with gardens are now in demand more than ever as people see the advantages of having a garden where they can spend time, leading to higher prices. Houses with open kitchen plans are also less favoured as people now seek more privacy even in their homes. Some homeowners are putting up kitchen walls to be able to sell their houses.

Buyers are also moving towards homes near parks, rather than near the Tube, something unheard of before the lockdowns. This followed a new interest in green spaces as Londoners sought for their therapeutic and recreational values. In many neighbourhoods, the pandemic period freed up these amenities which were previously unattractive as the management often rented them out for events like music festivals with resulting damages.

So, determining if your home has increased in worth or not depends on many factors.

rental properties

Apartment prices dropping

While housing prices generally rose during the pandemic, the prices of some types of homes did go down. For example, the prices of flats dropped by 0.1 per cent. New-build flats dropped by 0.7 per cent.

This took place as households upsized with their home purchase during the pandemic, leaving behind a glut of flats and dropping prices. There was a significantly less pool of buyers as people moved away from the capital city.

Smart home shoppers seized the opportunity to snap up apartments with the best value for money.

Housing inequality is stronger than ever

London housing experts have reported an increase in the divide between people who can own homes and those who cannot.

One of the reasons for this was the stamp duty holiday which removed the tax advantage first-time homebuyers enjoyed. This made it so that the sufficiently wealthy saved more on their purchases. The effect was that the number of home sales in the £200,000 - £300,000 fell by 11 per cent.

Conclusion

If you too are wondering about what will happen to your property after Covid-19, get in touch with our team at TRPE- The Real Property Experts on 02077232393 or call in and see us.

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Fees

Refundable Holding deposit

Capped at 1 weeks rent

Security Deposit

Capped at 5 weeks rent for annual rental under £50,000, or 6 weeks rent for annual rental over £50,000

Rent

The agreed monthly rent

Changes to tenancy

Capped at £50 inc VAT

Early termination charge

Not exceeding the landlord’s financial losses

Late payment of rent

Interest of 3% above BoE base rate for each day the rent is late, once it is 14 days overdue

Replacement keys

Reasonable costs or give the tenant the option to purchase themselves

Utilities, council tax, communication services, TV Licence etc

Tenants own responsibility unless otherwise stated in contract

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