Pre-pandemic, tenants renting prime residential property were often prepared to compromise on location in favour of well-maintained accommodation and high spec fixtures and fittings.

So when we asked about the things that matter most when looking for a new rental home now, the answers in our survey revealed how Covid-19 has changed short-term priorities. Location ranked first followed by the attributes and then condition of the property.

The findings of our December survey of more than 500 tenants and landlords in the prime rental markets of London and the wider UK broadly reflect what we have seen in the sales market: increased desire to move out of the capital for more space and access to the countryside, and demand for houses with gardens rather than flats in the city itself.

Of the tenants surveyed outside London, a greater proportion were families with pre-school or school-age children, and a higher percentage were renting to get to know a new area. More than half were anticipating renting for less than a year, or up to two years at most. This points to the ‘try before you buy’ approach to a lifestyle rethink, borne out in the Cotswolds, for example, where our average rental agreement has risen from £588 per week in 2019 to just over £1,500 in 2020.  

The change represents the increased demand for larger homes rather than a very steep rise in rents. This same drive for larger homes drove rental growth of 3.4 per cent across the extended London commuter belt over the course of last year.

Given the increased emphasis on a good work-life balance, seven out of 10 tenants said they would be more inclined to work from home in the future as a result of Covid-19 with half of them significantly more inclined to do so. Three quarters of those respondents thought this would be for three or more days a week, indicating that some of the changing patterns of demand may have a lasting impact.

While lifestyle drivers have been shifting demand away from the capital as a result of the pandemic, London has begun to see renewed interest this year. Our prospective tenant registration levels are up 13 per cent compared with January 2020 with moves planned for April and May, likely in anticipation of an end to lockdown. 

However, our survey revealed a disconnect between the rental expectations of landlord and tenants in the capital, with 55 per cent of landlords believing rents will stay the same or go up over the next 12 months while two thirds of tenants think that last year’s falls will continue. Realistic realignment will be key.

For more information on rental values see our latest Spotlight: Prime Residential Rents.

Further information

Contact Jessica Tomlinson

Contact Savills Residential Lettings