The Times is today reporting that rent values in the UK’s cities have dropped by as much as 45% as a result of workers no longer needing to live close to city centres amidst the rise of remote working. But our in-house property expert appeared on TalkRADIO to argue that a more nuanced understanding of the industry is vital in order to appreciate what’s going on.
The Times reports that to rent a flat in London’s famous Baker Street, today you’ll only need to spend £2,600 per month, compared to almost £4,300 you’d have had to pay back in May.
Are the numbers accurate?
The figures being presented by The Times paint a fairly depressing picture for the future health of our major city centres – retailers are already scampering away thanks to the pandemic forcing more shoppers online, so if residential buildings are also being abandoned, our cities could soon look very bleak indeed.
But are the numbers accurate? Is the picture actually this bleak? Or is the data wrong?
According to the Homelet Rent Index, average rents in London have indeed fallen by 3.7% between October 2019 and October 2020, but this is a far cry from the 45% being reported in The Times.
Furthermore, the average rent for the whole of the UK is up by 2.2% year-on-year when compared to October 2019.
So, while there may be a trend for people leaving central London, it’s nowhere near the catastrophe that some would have you believe.
Elsewhere in the country, there’s little to suggest that major cities such as Manchester and Birmingham are struggling, and they are certainly nowhere near being ‘deserted’. In fact, according to propertydata.co.uk, we’re actually seeing some very impressive growth in rent values for cities such as Nottingham (rents up 11.4% since May), Swansea (up 11.2% since May), and Newport (up 13.4% since May).
There are, however, a couple of big cities where rent values are falling, including Edinburgh. The Scottish capital has seen values drop by 6% between May and October this year, a figure which represents the most dramatic fall in the UK.
The only other city to come close to such tumbling values is Cambridge where, over the same period of time, values have dropped by 5.4%.
Our very own property expert, Russell Quirk, appeared on TalkRADIO with Mike Graham this morning (16/11/20) to discuss this matter further.
You won’t be surprised to hear that he believes this Times report is flawed to say the least: another piece of panic-inducing journalism which cares more for eye-catching headlines than finding the true facts and reporting them clearly.
The UK’s cities are not tumbling. Nothing of the sort is happening. What’s actually happening is that the entire world is experiencing an unpredictable shared pandemic and people and markets are doing the best they can to work out which way is up. It’s inevitable that this will bring some uncertainty and some changes, but this isn’t the apocalypse.
Catch up with TalkRADIO to hear exactly what Russell had to say.