It’s Back - London lettings market returning to equilibrium

The London rental market is shifting towards equilibrium for the first time since the end of the pandemic, according to Foxtons.

In line with seasonality trends, October saw an average of 14 renters per new instruction, in comparison to 23 renters per property during peak lettings season in August. Locally, East London led with an average of 18 prospective renters showing interest in each listing.

Demand in October shifted towards expected seasonal patterns, with Foxtons data revealing a 32 per cent month-on-month decrease in tenant enquiries. This aligned with a broader 12 per cent decrease year-on-year, suggesting a gradual return to the market's usual rhythm after the atypically active period in 2022.

As demand ebbs in line with seasonal expectation, the number of new properties coming onto the market has continued to rise. 

Foxtons’ analysis of Zoopla property data reveals a 12 per cent year-to-date increase in new rental listings for 2023, compared to the same period in 2022. The Westminster area saw the largest rise, with nearly 12 per cent of all new listings introduced to the market in London as of October.

The month-on-month variation in rental prices compared to September was modest, a slight one per cent dip, Foxtons reveals. 

Year-to-date rental prices have climbed nine per cent in London, however average rent has remained mostly flat since May this year. West London showed the lowest rent figures, with average rent standing at £484 per week signifying an 11 per cent increase year-to-date.

Gareth Atkins, managing director of lettings at Foxtons, says: “In October, London saw its typical decrease in renter registrations, which we’ve all come to expect after the summer rush ends and we head into the calmer winter season. At the same time, we are encouraged that the 12% increase in rental instructions suggests landlords remain confident in London’s unfailing appeal."

And Sarah Tonkinson, managing director of Build to Rent at the agency, adds: “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. With our expertise and data-driven approach to pricing, we help landlords tap into the larger market – two in every five Foxtons renters choose their new home outside of their initial search area.”