London rental market beginning to stabilise say Foxtons

London rental market beginning to stabilise say Foxtons

0:01 AM, 22nd February 2024, About 4 months ago

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Rental prices in the capital saw a slight downturn amidst increasing supply, according to new research.

According to letting agents Foxtons, rental prices decreased by 1% in January 2024 compared to the same period in 2023, Foxtons say this small decrease in rental price could be attributed to increasing supply.

The average weekly rent in London at the start of the year was £544 compared to central London’s £627.

Landlords may need to take a more active approach

Data by Foxtons reveals from December to January, there was a 93% month-on-month increase in applicant demand, aligned with the usual seasonal trend in the lettings market.

While demand was 10% lower than January 2023, compared to January 2019 – the last year of a more traditional market – applicant demand was up 71% in January 2024.

Sarah Tonkinson, managing director of institutional PRS and build-to-rent at Foxtons, says the rental market is still “competitive”.

She said: “We are not expecting massive price growth across London’s lettings market this year, around 0 and 2%. The market is still competitive; January 2024 had 56% more applicants per new instruction than in 2019 – which we consider to be the last year that there was a more normalised lettings market.

“So while there is opportunity, landlords may need to take a more active approach to pricing and work with agents to place tenants and minimise void periods.”

Higher supply levels and less inflated demand

Foxtons say the year-on-year decrease of 26% in new renters per new instruction indicates a shift towards a more realistic lettings market, characterised by higher supply levels and less inflated demand.

Gareth Atkins, managing director of Lettings at Foxtons, says whilst the property market is beginning to stabilize it’s important for landlords to adapt their strategies accordingly.

“As forecasted, the start of 2024 has seen a more normalised lettings market, and as new properties come to the market, it will be important for landlords to keep track of how that affects their assets.

“The London lettings market can move quickly and be very localised, so a good agent providing timely market analysis and adjusting the strategies accordingly will help to attract the right qualified tenants.”

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