8:05 AM, 16th November 2022, About 2 months ago
New figures show that London’s rent prices have reached record highs, as rising interest rates and lack of supply put pressure on rents, Foxtons reports.
In October, rents reached a new record high of £571 per week, exceeding the previous high of £553 per week in September 2022.
This is a 4% uplift in comparison to September, which would typically be the peak for the lettings market.
Central London continued producing the highest average weekly rent this year at £643 per week, a 29% increase on prices seen in October 2021.
The estate agent also says that there were 22 renters competing for every new property in October, which is higher than any October the firm has recorded in 2021, 2020 or 2019.
While the number of renters competing has decreased from September, October’s 22 renters per new instruction is 40% higher year-on-year.
In October, demand for properties in London followed the usual seasonal downward trend, with a 38% reduction in renter registrations from September 2022 to October 2022.
However, when compared to October last year, tenant registrations are still 2% higher.
And with intense competition in the capital, renters have turned their attention towards the outer zones.
In South London, registrations are up 37% from 2021, and in West London, registrations are up 57% from 2021.
Applicants’ weekly budgets remained much higher than they typically do in October.
The average weekly renter budget last month was £485, which is more than £20 more than the average budget in October last year. Year-to-date, budgets are 7% higher compared to 2021.
For the second month in a row in 2022, Foxtons saw renters spending over their budgets to secure a property.
In October, renters spent 101% of their registered budget, a 3% increase compared to October 2021.
Gareth Atkins, the firm’s managing director – lettings, said: “Throughout our front offices and within our renewals team, October has proved to be a very busy month. Competition for London lettings is intense.
“Average rent prices have reached a new record at £571 per week, and we’re seeing a return to renters spending over their registered budget at 101% on average – a number we haven’t seen since before the pandemic.
“One reason for the competition is the rising interest rates, as renters who were considering homeownership are now looking to renew or find their next rental.
“Another reason is the sheer lack of supply.”