Attention has turned over the last month to the population drop of London which has reduced for the first time since 1988. ESCoE estimations put the number at 1.3 million people leaving during the period of the coronavirus pandemic.
Most news outlets have in headlines connected the reduction to the effect of Covid19 and in many ways this is true. There has been a rise in tenant and owners desires for more space as they spend more time at home, affordable accommodation as finances get restricted for many, and companies acceptance of work from home conditions changing the need for a commutable location to the inner city.
The rental rates are confirming this change with reports listing over the last year the difference in inner London rental prices compared to outer London have reduced from a 44% difference to a 21% difference with some of the biggest contributors being Kensington and Chelsea with a 10.2% rent decrease and City of London by dropping by 15% according to a Hamptons report.
Meanwhile house prices are climbing in the outer suburbs, but debate has arisen around this as well with the Land Registry data suggesting a 9.7% increase in 2020 while Zoopla have reported a 3% increase in home value. This increase whatever the size could be attributed to the government's endeavors with the stamp duty holiday, with a lot of private landlords moving the ownership of properties into limited companies and investors looking to seize a potential opportunity in the volatile market.
A positive outlook is what most in the estate industry want, to promote competition on price and consumer confidence driving them to act now and not wait until safer times. But currently there is no real evidence of action to move the market into a safer place, especially when looking at the supply vs demand.
Demand has decreased rapidly with the reduction of international students through travel restrictions, the restrictions and uncertainty of Brexit and the political relations with many countries especially China which will all contribute to the concerns of the future demand.
Hope will grow once the future is easier to see, with international relations and travel stabilising so everyone can plan for the long term with a better understanding to make more informed decisions.
Written by Toby Dawson
