London lettings renewals surge as supply falls

More London tenants are choosing to stay put, with renewal activity climbing while available rental stock across the capital continues to contract.

Chestertons reports that tenancy renewals rose 16.2% month-on-month in February.

That suggests a growing share of tenants are remaining in their existing homes rather than moving, the firm says.

New landlord instructions increased 2.8% year-on-year, bringing a small addition of properties to the lettings market.

London’s PRS is resilient

Adam Jennings, the head of residential at Chestertons, said: “London’s rental market continues to demonstrate resilience.

“The notable increase in tenancy renewals shows that many tenants are choosing to stay in their current homes, while the rise in new instructions highlights that landlords continue to recognise the strong long-term fundamentals of the capital’s lettings market.”

He added: “With supply remaining constrained across much of London, we expect rental values to stay well supported in the coming months.”

The data shows that rented home supply in the capital fell 5.4% year-on-year.

Homebuyer demand recovers

There were also changes in London’s sales market during February after several quieter months ahead of the late November Budget.

Terms agreed rose 30.9% month-on-month and new sales instructions increased 7.3%.

Portal enquiries recorded a year-on-year decline of 3.3%, narrower than the 6.3% fall reported in January.

Activity across viewings, offers and exchanges also posted smaller year-on-year declines than in the previous month.

Mr Jennings said: “Improving affordability in London, along with the early signs of returning buyer activity, suggests that the market is gradually regaining momentum.

“Our data shows buyers and sellers are starting to re-engage and we expect this cautious optimism to support a steady strengthening of activity over the coming months.”