Average London rents have fallen by 3 per cent since the start of the year to £1,614 per month and an annual decline of 5 per cent is expected by the end of 2020, according to Zoopla.

Over the year to June rents in the capital fell by 1.4 per cent, the property website, while excluding London, UK growth remained in positive territory with rents up by 2.2 per cent to £735 a month.

However, Zoopla predicts that rental growth excluding London will halve to 1 per cent by the end of the year.

The website reports that a two-speed market is emerging driven by divergent trends in supply and demand between London and the rest of the country

It says that inner London is experiencing the greatest downward pressure on rents.

The decline in tourism has seen landlords in the capital moving away from short-term lets, which has increased the supply of longer-term rentals. 

Zoopla says that the rise of homeworking at many firms, with a slow return to offices over the rest of the year, signal that demand for rental property is likely to remain subdued, especially if unemployment starts to rise. 

Commuting data shows that working patterns in London are still far from returning to levels seen back in March.

Edinburgh, which is the second most popular tourist destination in the UK, has also seen a sharp slowdown in rental growth which Zoopla attributes to a reduction in short-term rentals resulting in more landlords switching to long-term tenancies.

The Scottish capital has seen rental growth plunge from 4 per cent in the year to June 2019, to 0.2 per cent over the 12 months to June 2020, with average monthly rents now £913.

Rental growth across the regions and countries excluding London remains positive – from 1.5 per cent in the West Midlands to 3.1 per cent in Wales – supported by pent up demand for rented housing

Head of research Gráinne Gilmore says: “The future path of annual rental growth will be determined largely by the economic outlook, especially the rise in unemployment and the future path of average earnings. 

“However, as new rental supply continues to catch up with demand levels, we could see further softening of headline rental growth by the end of the year, although there will be some areas of outperformance.

“Uncertainty continues over how any further outbreaks of Covid will impact the resumption of office life, student life and tourism, and this uncertainty will impact demand in some markets during the rest of the year.”