Rental affordability improving at last, says Foxtons

New figures today from London-focussed lettings agency Foxtons shows growth in the supply of lettings properties on the market is starting to ease tenant affordability.

It says the number of properties brought to the market rose in March, with listings up 19 per cent compared to the previous month.

This influx of instructions took the total to around 30,000, up from volumes of around 25,000 seen in previous months. Whilst still below pre-pandemic levels of stock, the additional instructions are a step towards a better balance between supply and demand, the agency claims. 

The boroughs of Westminster and Tower Hamlets continued to have the highest concentration of new lettings instructions coming to market.

Overall, monthly volumes in the first quarter of 2023 followed a similar pattern to 2022, with South London remaining the most popular area for renters; year-to-date in March, applicant registrations were up 11 per cent from last year, considerably higher than any other area in London.

Applicant demand remains strong and rose four per cent from February to March, with demand reaching similar levels as in March 2022, just a slight one per cent decrease year to date.

However, due to a rise in new instructions, the ratio of 17 new renters per new instruction in March was 17 per cent lower than the previous month and seven per cent lower year-to-date. The number of renters competing for each new instruction decreased in all areas of London year-on-year, except for West London, which grew 14 per cent.

The introduction of the Elizabeth Line tube service might factor into the level of competition, opening up opportunities for renters to achieve their desired commute from a West London property into Central London offices, the agency ponders.

The effect of higher stock levels has had some impact on prices, with the average weekly rent down four per cent compared to last month. However, rental prices were still 14 per cent higher compared to 2022 year-to-date. East London had the highest year-on-year increase in average weekly rents, at 17 per cent compared to last year, with Central and South London following closely at 16 per cent.

Foxtons data showed that in March, the average budget for applicants remained high. It increased one per cent compared to February 2023, and eight per cent year-to-date compared with 2022. Applicants looking to rent in North and East London increased their budgets the most compared to last year, at 14 and 13 per cent respectively.

Gareth Atkins, the agency’s managing director of lettings, says: “At the beginning of the first quarter, we said the market would show the same strength as last year’s first quarter, but it would climb through 2023 at a much steadier rate, requiring renters to remain vigilant as stock comes to the market out of season. At the close of the first quarter, this prediction is right on track. Supply and demand have hit similar levels to 2022, and we’re beginning to see savvy renters register their search in advance of the summer rush.”