May 2023 has witnessed the average weekly rent in London leapfrogging £600, demonstrating an 8% surge from the previous month and a 13% rise year-on-year, according to data from Foxtons, a leading lettings agent in the city.
Foxtons’ latest figures reveal that the average weekly rental prices in May have outstripped the 2022 peak. Central London maintained its record for the highest average weekly rent, while East London reported the most substantial year-on-year growth at 18%, compared to May 2022.
The company’s analysis indicates a significant uptick in market activity in May, marking the onset of the bustling summer lettings period. New property listings and applicant demand increased by 22% and 31% respectively, from April to May.
Although registrations have largely remained consistent with last year’s figures, there was an 8% rise in South London and a 13% surge in West London compared to the same period in the previous year.
The average rental budget for applicants escalated by 2% from April to May. Applicants seeking to rent in North and East London were observed to have augmented their budgets the most, with a 12% increase compared to the previous year.
For the first time in three months, the proportion of the budget renters allocate to secure a property has increased, pushing the overall average to 102%. In Central London, renters spent 108% of their registered budget in May 2023, marking a 7% hike compared to April 2023.
In terms of competition, Foxtons found that the ratio of new renters to new instructions escalated by 8% from April to May, while it dipped by 5% year-on-year. West and South London emerged as the most competitive regions, with 27 renters per new instruction year-to-date, a 9% rise from last year in West London.
Gareth Atkins, Managing Director of Lettings at Foxtons, commented: “We are seeing a return to the more traditional demand and supply cycle, similar to the pre-Covid era. However, despite the increase in properties available for rent in May, the demand from applicants is significantly surpassing the supply. This is due to the usual summer influx of university students, corporate relocations, families moving during school holidays, compounded by the fact that supply levels have not recovered to pre-Covid numbers. In May, there was an 8% increase in renters per each new instruction, indicating the forthcoming competition.”
Sarah Tonkinson, Managing Director of Institutional PRS and Build to Rent at Foxtons, said: “As we stand at the threshold of the summer lettings rush, we’re witnessing key metrics that mirror last year’s levels, indicating another busy summer ahead. Despite a 22% increase in new listings in May, renter demand is already surpassing supply. With weekly rent prices crossing the £600 mark and setting new records, all eyes will be on this metric as the market continues its ascent towards the peak season.”