London room rents plummet as new Covid strain adds more woe

Data from PropTech platform SpareRoom suggests that London’s typical room rent has dropped further, this time in response to the new variant of Coronavirus which has deterred tenants.

SpareRoom says average room rents in London fell eight per cent from £781 in the final quarter of 2019 to £715 in the same period at the end of last year. 

This is the third consecutive quarter that London has seen a significant decline in average room rents, with rents down throughout 2020. 

In Q4, every London region was down year on year with the EC postcode seeing the biggest drop in rent (down no less than 19 per cent in 12 months), followed by the WC postcode down 16 per cent and the W postcode down 12 per cent. 

Eight out of the 10 postcodes where rents fell most sharply were in Zone 1. 

SpareRoom says 27 per cent of renters in London plan to move after the pandemic has come to an end, with half of them intending to leave the capital altogether. The upshot is a projected 13 per cent net exodus of renters from London, the platform claims.

The London postcodes where room rents have dropped most over the last 12 months are EC3 (Aldgate) down 26 per cent; SW1 (Westminster/Belgravia/Pimlico) down 23 per cent; EC2 (Bishopsgate/Cheapside) down 21 per cent; and W8 (Holland Park) down 20 per cent. 

The cheapest areas to rent a room in London in Q4 2020 were SE2/Abbey Wood (£536), followed by E6/East Ham (£545) and N18/Upper Edmonton (£551). 

The most expensive place to rent a room in the capital continued to be EC4/St Paul’s with an average monthly rent of £1,262. Following this was SW7 (South Kensington/Knightsbridge) at £1,103 and SW3 (Chelsea) at £987. 

Matt Hutchinson, SpareRoom director, comments: “London rents continue to fall and, as has been the case throughout the past year, it’s the expensive areas where they fall the fastest. We’re now seeing the biggest drop in London room rents since spring, and there’s no immediate sign of a recovery.

“The first national lockdown made people think twice about living in cities, especially London. With another lockdown now underway it’s hard to see that changing any time soon. In the short term it means cheaper rents for those who stay in the capital, but longer term it’s going to be more about how quickly industries like entertainment, hospitality and tourism, which London relies so heavily on, recover from the pandemic.”