The London rental market is showing signs of stabilisation, as indicated by recent data from Foxtons, a leading lettings agency in the city. Key observations from the report include:
- Average rental prices in October remained consistent with those since May, suggesting a period of stability in the market.
- Foxtons recorded a 32% decrease in renter registrations month-on-month, aligning with the expected seasonal trends in the lettings market.
- The agency observed a 12% increase in new rental instructions throughout the year to date.
Foxtons’ analysis points towards a more balanced market, with a notable decrease in the ratio of renters to property listings. October saw an average of 14 renters per new instruction, a decrease from the 23 renters per property seen during the peak season in August. East London led regionally, averaging 18 prospective renters per listing.
The reduction in tenant enquiries by 32% month-on-month in October fits with the expected seasonal patterns and represents a 12% year-on-year decrease. This shift suggests a normalization of the market following the unusually active period in 2022.
New property listings have been on the rise, with a 12% increase in new rental listings in 2023 compared to the same period last year. Westminster experienced the most significant growth, contributing nearly 12% of all new listings in London as of October.
Rental prices showed only a slight 1% decrease month-on-month compared to September. While year-to-date rental prices in London have increased by 9%, the average rent has largely remained flat since May. West London reported the lowest rent figures, with an average of £484 per week, which is an 11% increase year-to-date.
Foxtons’ year-to-date market indicators show a 12% increase in new instructions across London, with a corresponding 12% decrease in new renter registrations. This trend is consistent across various London regions, including Central, East, North, South, and West London.
Gareth Atkins, Managing Director of Lettings at Foxtons, commented on the market’s seasonality: “In October, London saw its typical decrease in renter registrations… At the same time, we are encouraged that the 12% increase in rental instructions suggests landlords remain confident in London’s unfailing appeal.”
Sarah Tonkinson, Managing Director of Institutional PRS and Build to Rent at Foxtons, added: “For the first time since 2019, the London lettings market is seeing regular seasonal trends, including a Q4 decrease in demand. However, demand still outpaces supply, and properties are still being let quickly, so long as they’re listed at the right price.”
These observations from Foxtons underscore a period of equilibrium in the London rental market, with a balance emerging between supply and demand.