London rental market sees increase in tenant demand

Average rental prices have remained stable

London rental market sees increase in tenant demand

Market sentiment has improved in London, with tenant demand increasing by 12% in April compared to March, latest data from Foxtons has revealed.

Despite a 10% decrease in demand year-to-date compared to 2023, the capital’s largest lettings and sales agent reported a 6% rise in demand last month compared to the April 2023.

The seasonal upturn in the lettings market also contributed to the higher demand. An increase in supply during the first quarter had slowed competition, prompting renters to take advantage of the current market conditions.

Average rental prices have remained stable, with a 3% increase in April 2024 compared to last year. The average rental price in London now stands at £555, with Foxtons expecting rental prices to remain steady over the next quarter.

There has also been an 11% increase in new market listings since the beginning of 2024, but April 2024 had the same number of new listings as April 2023.

The number of new renters per new instruction has remained constant at an average of 14 per instruction throughout 2024, a 22% decrease compared to 2023. South and West London showed the highest number of new renters per instruction, with averages of 19 and 18, respectively.

Applicant budgets have increased by 3% year-to-date compared to 2023. As demand rises seasonally, applicant budgets are following a similar trend. West London has the lowest average applicant budget at £481, a 4% year-over-year increase. Central London continues to command the highest applicant budgets, averaging £580.

“The first quarter of 2024 saw a significant influx of new properties compared with 2023 and as such, less renters per property – or in broad terms, competition,” said Gareth Atkins (pictured), managing director of lettings at Foxtons.

“One of the knock-on effects of that was a stagnation of average prices, which we predicted in January. Early data from the second quarter has seen not only that supply slowed but also the return of 2023 levels of applicants which, if it continues, would indicate a stronger rental market.”

“The spring market has definitely sprung into action, and registrations for Build to Rent are coming in thick and fast,” added Sarah Tonkinson, managing director of institutional PRS and built to rent at Foxtons.

“Foxtons’ Build to Rent portfolio is already seeing a significant increase in under offer and exchanged leases compared to the same period last year. This time of year, applicants commerce their searches in earnest buoyed by the lighter evenings and better weather. Students want to secure a lease for September before they leave for summer.”

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