Rental prices now relatively stable, says lettings estate agency
Applicant demand in London’s lettings market rose by 9% in a month, but dropped by 14% on a year-on-year basis, indicating a return to more typical market trends compared to the past two years.
Data from Foxtons, the largest lettings and sales agent in the capital, revealed that demand was highest in South London, where there were nearly 17,000 applicants in March, surpassing Central London by 18%.
Despite the monthly increase in demand, the ratio of new renters per listing has declined overall, with London seeing an average of 14 applicants per new instruction in March, down from 17 previously. However, East London experienced a significant 23% increase in this ratio in March.
The Foxtons Lettings Market Report also showed that rental budgets have continued to rise, with a 3% increase in 2024 over the previous year. Central London maintains the highest average budget at £579, marking a 2% year-on-year increase.
While early 2024 saw a boost in new market listings in January and February, the trend moderated in March with just a 2% year-on-year increase. This has resulted in a 15% rise in new instructions for the first quarter of 2024 compared to the same period in 2023.
Meanwhile, average rental prices have remained relatively stable, mirroring the trends from 2023 with a slight 1% decrease from the previous year. Regionally, North and West London saw increases of 3% and 5%, respectively, while Central London experienced a 5% decline.
“Inflation has dipped to its lowest point in two and a half years, with interest rates expected to follow,” said Gareth Atkins (pictured), managing director of lettings at Foxtons. “This should give buy-to-let landlords the green light going into Q2.
“Furthermore, sales stock is now at its highest in eight years, increasing competition among sellers, which could give pause to landlords who were tempted to sell. Going into the Q2 market, we should see London’s companies begin recruiting drives and lettings activity pick up prior to the busy period in summer.
“However, average rent prices are expected to remain broadly flat in response to affordability pressures, which would enable more renters to secure their homes in the capital.”
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