London Luxury Homes Suffer Worst Rental Slump in Over a Decade

(Bloomberg) — It’s a pretty good time to be renting a posh London pad.

The price to lease a home in the capital’s wealthiest areas slumped by an annual 8.1% in September, the steepest in more than 10 years, according to broker Knight Frank. Landlords are flooding the market with short-term rentals as tourists stay away from the capital, and more owners are opting to rent out properties amid the pandemic uncertainty.

The pain for owners in London’s priciest districts will likely continue into the current quarter, with Knight Frank forecasting a 9% decline for the whole year. Step outside the capital, though, and it’s a different story: nationwide rents are going in the other direction as renters search for homes with more space and larger gardens.



chart, histogram: London's Falling


© Bloomberg
London’s Falling

Rents also slipped as international students snubbed high-end properties in central London, the report said. Less interest from corporate clients also contributed, as the resurgent virus keeps white-collar workers at home.

There’s a bit of good news for central city landlords. Knight Frank sees prices starting to recover in 2021, as knock-down prices bring tenants back to the capital.

Read more: Manhattan Apartments Haven’t Been This Cheap to Rent Since 2013

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