The impact of lockdowns across the world on both the number of tourists and corporate relocations into the UK has resulted in some landlords choosing to move their short-term rental properties back into the long-term rental market, according to the latest (July 2020) 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.
Between the lifting of lockdown in late May and the end of July, almost one in eight (12%) homes that came onto the rental market in Zone 1 had previously been let on a short-term basis. This percentage get smaller the further out of London the property was, with Zone 2 seeing a -9.3% reduction, Zone 3 (-4.6%), Zone 4 (-1.3%), Zone 5 (-1.0%) and just a -0.7% reduction in short-term lets in Zone 6. Across London as a whole, the figure stood at 5.1% over the same period.
Hamptons estimates that 37% of homes in London that had previously been advertised on a short let basis are now being offered for long-term occupation. However, landlords switching their property from a short to a long-term let are likely to see a significant reduction in rent. On average the change means a 35% reduction in rent, equating to £1,952 a month less for homes in Central London.
Homes previously let on a short-term basis have contributed to the increasing number of overall properties available to rent in the capital. In July there were 26% more rental homes available in London than at the same time last year. Indeed London was the only region in Great Britain to record a year-on-year increase in the number of rental homes on the market. Almost all this increase took place in Inner London where the number of homes available to rent rose 42% on last year.
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.
