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Short lets buoy London's rental market

estate agent giving house keys to woman and sign agreement in office
estate agent giving house keys to woman and sign agreement in office

Coronavirus has prompted a new trend across the world in he housing market, as the number of tourists and corporate relocations have plummeted. Short-let landlords are choosing to move their short let properties onto the long-term rental market.

According to data published in the Hamptons International Monthly Lettings Index, this trend has mainly been concentrated in Inner London, and is one of the biggest factors leading to record rent falls in the capital.

The data show that more than one in 10 (12%) homes coming onto the rental market in zone one in London since May had previously been let on a short-term basis, according to new data.

Alongside this, 37% of homes in London which had been advertised as a short let are now being offered for long-term occupation.

Additionally, the number of homes available to rent in Inner London is up 42% on the same time last year putting downward pressure on rents.

The shift from the short let to the long let market is almost exclusively London driven. Of the 20 local authorities with the highest share of short lets being offered on the long-term rental market, 16 were in the capital, suggesting rural and coastal short let markets are performing more strongly.

The Vale of White Horse in Oxfordshire is the first local authority outside the capital to appear on the list, with 3.6% of its instructions previously listed as a short let.

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In July the average cost of a newly let property in Great Britain fell to £1,001 per calendar month, 0.1% lower than the same month last year.

Rents in London fell 4.2% year-on-year in July, sparked by a record rent fall of 8.4% in inner London.

Aneisha Beveridge, head of research at Hamptons International, said: “For years there had been a steady stream of landlords moving from the long to the short let market in search of higher returns. However following lockdown and in the two months since late May, this shift has been completely reversed with growing numbers of landlords looking to secure longer-term tenants.

“This is particularly evident in urban tourist and corporate relocation hotspots, nowhere more so than central London. And with three-quarters of landlords who have secured a long-term tenant signing 12 month or longer contracts, they are unlikely to return to the short let market any time soon,” she continued.

“However the rising popularity of staycations has meant that rural and coastal areas have kept the short-let market outside of urban areas more buoyant.”