Rents for homes in central London had a record decline last month as landlords flooded the market with properties previously rented out through companies such as Airbnb Inc.
Houses in the city center rented for 7.4% less than a year earlier in June, according to data compiled by broker Hamptons International. The number of homes available to rent shot up by 26% in inner London, driven by houses previously occupied for short periods by visitors to the capital moving to the long-term market.
The decline in London contrasts with other parts of the U.K., where rents climbed, highlighting the divergence of demand for properties that were once prized for their proximity to offices and those in cheaper areas with more green space.
The coronavirus pandemic has upended real estate markets as office-based employees adjust to working from home, raising questions about the need to pay a premium to be close to work. Lockdown measures including travel restrictions have battered the tourism and hospitality industries, leaving landlords used to renting out their properties to visitors to seek other sources of income.
Across London, the number of homes available to rent increased by 14% in June, and rents fell by 4.5%, Hamptons data show. The number of people looking for a rental home in the city fell by 9%.