Private rents in England hit a record high during coronavirus lockdown

Private rents in England hit a record high during coronavirus lockdown

Private-sector rents in England hit a record high of ₤700 a month just as the country was heading into coronavirus lockdown, according to numbers from the Workplace for National Data (ONS).
The typical rental fee was highest possible in London, at ₤ 1,425 a month, as well as most affordable in north-east England, at ₤ 495.

The most expensive area to rent was Westminster, where the average was ₤ 2,492 a month, or five times the average rental fee in England’s cheapest area, Hull, where renters typically pay ₤ 420 a month.

The data covers the duration between 1 April 2019 and 31 March 2020, with the ONS observing that “it has not been higher”.

Record-high rents will fuel problems regarding affordability, and also the expanding component of a tenant’s total earnings that is passed to Landlords. An earlier study has actually shown that occupants usually invest 41% of their income on real estate prices.

In total, about 8.5 million individuals rent out privately in England, with lots of reporting unaffordable rent, inadequate living problems as well as the danger of eviction.

When the Covid-19 pandemic struck, home loan owners and also landlords with buy-to-let profiles were supplied repayment holidays, however, tenants needed to count on these being handed down.

Nonetheless, last week the federal government prolonged its restriction on expulsions in England and Wales by an additional 2 months, prolonging the moratorium for thousands of renters that have struggled to pay the rent throughout lockdown.

Caitlin Wilkinson, the policy manager at the campaign group Generation Rent, said: “At the outset of this crisis, renters were spending more on housing costs than at any time previously. In light of these figures, it’s not surprising that many private renters who have since lost income are struggling to make ends meet.

“While we don’t yet know the impact of the pandemic on rents, we do know that more than half of tenants who have requested a rent reduction have been asked to pay in full. These figures highlight the need for the government to provide rent relief to those struggling with sky-high rents as part of the UK’s coronavirus recovery strategy.”
Few housing experts predict that rents will fall by much, even if the pandemic prompts a slump in house prices.

Researchers at Savills UK this week revised their house price forecast for 2020, and now expect a 7.5% fall in 2020, down from a previous forecast of -5%. But they predicted rents would fall by just 1.5% this year before rising by 5.5% next year.

Savills said: “Rental values tend to be more resilient than capital values during a downturn. Rents fell just 2% following the financial crisis, whereas house prices fell -18%. We expect rents will also remain relatively resilient in the coming months and years, albeit there may be greater pressure in areas more reliant on international tenants and students.”

With rents hitting an all-time high, tenants will likely find themselves looking for cheaper accommodation, leaving landlords in and around London without tenants

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