The London rental market is feeling the negative impacts of the lockdowns and travel restrictions as the number of international students dwindle, the latest report says.
A report by Chestertons revealed that the decline in the number of international students is causing the decline of the London rental market. London rents have fallen between 10 and 15 percent.
The student market has been vital over the past decade. In central London, around 30 percent of the tenants in the summer months are international students.
In areas that are more popular with international students, this figure can go higher. These areas include places where major universities are.
The pandemic is estimated to bring down the number of international students from 50 to 75 percent. Thus, there has been an oversupply of rental properties. The rental market, consequently, fell, especially in central London.
However, Chestertons Head of Lettings, Richard Davies, is still optimistic. He said the lifting of travel restrictions in many countries could turn things around. Students would be returning during the remaining two months. That would help rents recover.
Mini-boom in Britain housing market
Meanwhile, Britain's housing market is experiencing a mini-boom, according to Rightmove. That growth is happening thanks to the stamp duty cut.
As homes across Britain come back to the market, pent up demand was released. Buyer inquiries also shot up. In July, the average asking price hit a record high of 2.4 percent to £320,265. That figure is higher than the pre-lockdown level. The 3.7 percent annual increase is also the highest since December of 2016.
The number of inquiries rose 75 percent year-on-year. Rightmove expects it to go even higher. This is because Scotland's housing market has just opened. However, Wales still has some restrictions.
The announcement of the £3.8bn stamp duty cut caused buyer surge to rise higher. The suspension of stamp duty on England and Northern Ireland homes valued up to £500,000 is until March 31, 2020.
The inventory of properties coming to the market is up by 11.1 percent from one year ago. The uptick came despite Wales and Scotland not fully contributing. In the first month of reopening, more than 40,000 or 44.4 percent of the newly listed properties already found a buyer.
The data covers the period from June 7 to July 11, 2020. The study includes England, Scotland, and Wales. Property viewings resumed in England last May 13. In Northern Ireland and Scotland, physically distanced viewings were allowed last June 2020. The Wales property market partially reopened last June 22.
The stamp duty holiday will not benefit most first-time buyers. They are already exempted from purchases of up to £300,000. However, many will benefit from lower-deposit lending, which will further boost buyer activity.
The report cautions sellers not to over-price, though. Sellers must find a suitable buyer before Christmas. They have only three months to complete the process before the stamp duty holiday ends.
