The UK capital’s luxury real estate market has been hit by the effects of the lockdown. Despite falling rental prices for houses in the most expensive areas of London, they remain empty for more than two months until a new tenant is found. This corresponds to the longest waiting time when renting out apartments since the last financial crisis.
At the same time, rents fell at the strongest annual rate in the last ten years. This was the result of evaluations by the real estate data company “LonRes” with reference to the “IrishTimes”.
London’s landlords remain seated on the objects
Due to the lockdown, office workers posted to the city are being withdrawn from their companies, tourists are largely staying away due to measures and restrictions. This causes problems for many landlords to rent out short-term rental properties, which were particularly in high demand among tourists or international students and employees, as reported by “IrishTimes”. For this reason, more and more landlords are being forced to lower rents or leave the properties empty, according to the report. Even high-priced areas of the capital such as Mayfair or Knightsbridge are not spared. In addition, according to the “IrishTimes” report, a flood of vacant properties came onto the property market in the British capital. Due to the pandemic, there were often no new residents following the expiring leases last year.
As evaluations by “LonRes” showed, the number of luxury properties in central London that can currently be rented rose by 75 percent compared to the previous year. In addition, rents for luxury properties within London fell by more than 14 percent in December 2020 compared to the previous year. “The landlords just have to get through this,” says Marcus Dixon, Head of Research at LonRes. With vaccinations against the virus coming up, Marcus Dixon is confident that recovery remains in sight.
Tenants in London can take advantage of the location
According to Marcus Dixon, now could be a good time for tenants to enter into negotiations with landlords in order to obtain possible rental discounts. Accordingly, more than half of the tenants managed to keep the price down. Marcus Dixon explains that landlords are currently trying to prevent vacancies as much as possible. “But the reality of the current situation is that there aren’t that many tenants, and those tenants can afford to be more picky,” said Marcus Dixon.
A long winter could be ahead for landlords and owners of the multi-million pound properties within the British capital. The lockdown and the reintroduced and tightened restrictions will limit rents for some time to come, according to the IrishTimes report.
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