New data shows 70% of tenants are renewing their rental agreements – the highest number since the last financial crisis in 2008.
The number of tenants looking to rent a home has plunged by 31% from February to March, research by letting agent Hamptons International reveals.
Rents on newly let homes have nudged up an average 1.2% in the year to March, to £980 a month, but from February to March, they declined 3.3%.
Landlords in the capital saw a 1.3% year-on-year decline, while those in Scotland enjoyed a 6.4% increase.
On renewing tenancies, rents changed little, with the data showing them slipping 0.5% down – the largest decrease recorded since 2014.
London saw the largest rent falls, averaging 2.2%, while in Scotland they rose 3.4%.
But rents are expected to fall even more as the lockdown continues, warned the researchers.
As demand has dropped, the number of available rental homes shot up by 11%, although the agency says this is lower than at the same time last year.
Hamptons head of research Aneisha Beveridge says: “Tenant concerns about future income prospects combined with greater risk of void periods for landlords willing to advertise their property on the open market, resulted in the rent falls.
“Once lockdown restrictions ease, we expect activity levels to rise. Renting offers more flexibility than buying a home, so as uncertainty rises, so too does the demand for rental homes. But although demand for rental accommodation is set to increase, and there are already signs of it picking back up again. The longer-term economic damage to people’s jobs and incomes means that rents on newly let properties are likely to fall between 2% and 5% this year.”