The average rental price in London has dropped by 5.2% between Q3 2019 and Q3 2020, according to Zoopla’s rental market report.

However, despite the fall in the capital, the wider UK rental market has noted a 1.7% rise over the same timeframe.

Belfast and Newcastle recorded the joint greatest annual increase in rental prices, up 3.5%.

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Moreover, demand is up 20% year-on-year. The report attributes this rise to the squeeze on lending for potential first-time buyers, which it believes is keeping them in the rental market for longer.

Furthermore, Zoopla believes that the lockdowns, as a result of COVID-19, are creating a two-speed rental market across the UK, with prices outside of London consistently outperforming the capital.

Gráinne Gilmore, head of research at Zoopla, said: “The split in the rental market caused by COVID-19 has now crystallised and we are seeing the two-speed market firmly entrenched.

“For most of the UK, the demand/supply gap is underpinning moderate levels of rental growth. We have not seen the exodus of students from cities and, as more people are staying in the rental market given the squeeze on mortgage lending, higher levels of demand will continue to underpin rents.

“At the same time however, muted earnings growth will start to limit the headroom for rental growth in some markets.

“The search for additional space, both indoor and outdoor, within the rental sector is also set to continue as the country goes through additional periods of lockdown.”