14 February 2023 – Record numbers of tenants in London are leaving the capital due to high rents, with 90,370 renters having left in 2022.
During the pandemic rents in London dropped, but have rapidly recovered since, which led to high numbers of renters leaving the capital in search of an abode that costs less.
According to new research by London estate agency Hamptons, 40% of all renters who moved home last year moved out of the capital. That’s 28% more than in 2012.
In the last decade, 718,000 renters moved out of London. 90,370 of those did so in 2022, 62% of which were longer-term tenants. This means they have been in their rented home for at least four years.
Renters Tend To Move More Frequently Than Homeowners
Hamptons data shows that there are more homeowners in London than renters, with a ratio of almost 2:1.
Because renters move around more often, the likelihood that they leave is higher. This has been confirmed by the research. While 90,370 renters moved out of London last year, only 62,210 homeowners did the same.
These figures show that the trend that was started during the pandemic has been reversed. In 2021, more homeowners left the capital than renters in search of bigger homes and more outside space.
This is the only time this has happened since 2012, which shows what extraordinary circumstances the pandemic has created.
Tenants Move Further Than Homeowners
When renters move out of the capital, they don’t tend to move very far. Most move to local authorities that border London. With 52%, Tandridge is the most popular area for renters to move to.
But that does not mean that all stay close to London. And when they do venture further, they tend to move bigger distances than homeowners.
Hamptons data shows that 38% of renters move to the Midlands or the North of England. This is an increase of 11% compared to 2019, when only 27% moved there. Only 13% of homeowners move to the same areas.
The reasons why people leave the capital have also changed since the pandemic. With flexible working now an option for many, work is no longer one of the main reasons to move.
In 2022, only 22% left the capital for work reasons. Five years ago, 32% did so. Flexible working allows many renters to keep their job in London, while benefiting from lower rents elsewhere in the country.
Because they can either work remotely or only need to go into the office on some occasions, tenants can get bigger rental properties in better neighbourhoods at prices 28% cheaper than in London.
That high rents are driving out many people is evidenced by Hamptons figures too. They show that it’s mostly renters from less affluent parts of London that decide to leave.
The data shows that 68% of renters who move out of London come from the 50% least affluent areas. This is not a new trend, however, as this number has been rising steadily over the last ten years.
Hampton predicts that the number of renters moving out of the capital will continue to rise.
Supply Of Rental Properties Increasing
Meanwhile, data from London estate agency Chestertons suggests that more rental properties are coming to the market, which will help to stabilise rent prices.
According to their data, 36% more properties were available for rent in January 2023 compared to January 2022. As a result, some landlords have started to lower their rents in order to attract tenants.
As we are now seeing more properties coming on the market, some landlords are prepared to reduce their asking rent. This is a key sign that the rental market is rebalancing following incredibly rapid hikes in rent seen in 2021 and 2022.
Richard Davies, COO of Chestertons
The estate agent is predicting that rents in London will continue to rise this year by 4.7% and then plateau in 2024.
Outside London, rent prices are also predicted to continue to rise in 2023. And the rest of the country also shows signs that supply issues start to ease. This might slow down the rate at which rents will rise.
Rightmove report the number of available homes to rent in the final quarter of 2022 was up 13%, with the number of new properties to let up 5% year-on-year. However, significant pressure remains.
Nicky Stevenson, MD of Fine & Country UK
High rents also encourage renters to stay put and extend their lease rather than moving. This also benefits landlords, who are keen to retain good renters.
However, there are also signs that some renters see the increase in supply as a good reason to move. Chestertons data shows that 8% more viewings took place in London this Janaury compared to last January.
There were also 13% more tenancies agreed at the start of this year compared to the start of 2022.
