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London Sees 10% Surge in Rental Supply as Market Stabilises, Reports Foxtons

London’s rental market, which faced an extraordinary scarcity of rental stock last summer, is showing signs of stabilisation with a notable increase in available properties as the summer of 2023 nears its conclusion. This insight comes from Foxtons, a leading lettings agent in the city.

Compared to the same period in 2022, there has been a steady 10% climb in the supply of rental properties over the year. This surge in supply, coupled with a standardisation in tenant demand, resulted in fewer new renters vying for each available property. Specifically, Foxtons noted that in September, there was an average of 19 renters for every new listing across London. This represents a 19% drop year-on-year and a 17% fall from August.

Remarkably, despite the growth in rental supply, prices have held firm. They’ve soared by 10% compared to the previous year, with no significant changes observed from one month to the next since May 2023. Even as applicant budgets expanded over past years, there was a typical seasonal dip of 3% from August to September.

Analyzing Zoopla data, Foxtons observed a 13% reduction in supply on a month-on-month basis, while demand plummeted by 32%, mirroring the expected market trends as the peak lettings season winds down. Westminster remained at the forefront, contributing 11% of London’s new listings to the market so far this year.

Throughout 2023, the proportion of renters’ budgets spent on securing a property has barely fluctuated, hovering around 99%, as per Foxtons’ data. This trend reached its zenith in May, at 101%.

Here’s a look at Foxtons’ key market indicators for the year to date:

  • All London: Supply up 10%, Demand down 11%
  • Central: Supply up 11%, Demand down 18%
  • East: Supply up 15%, Demand down 8%
  • North: Supply up 10%, Demand down 10%
  • South: Supply up 15%, Demand down 7%
  • West: Supply down 5%, Demand down 14%

Gareth Atkins, Managing Director of Lettings at Foxtons, shared his insights:
“Supply of rental properties in London has increased 10% compared to this time last year, which is very welcome news. However, we are still behind the levels we’ve seen in 2019, 2021, and of course, the post-lockdown market of 2020, so we’re not back to a normal seasonal market just yet. Prices continue to be at record levels, and I don’t expect that to change significantly in the short term, given we are currently still registering 18 tenants for every property we have on the market.”

Adding to this, Sarah Tonkinson, Managing Director of Institutional PRS and Build to Rent at Foxtons, stated: “As we head into Q4, budgets and prices remain high. Renters that move this time of year are often already living in London, know exactly what they want, and are experienced at renting in the capital. They will be searching for good value in the properties they choose to view and ultimately rent. With higher – but not plentiful – stock levels, landlords will need to ensure they are well priced to attract renters.”