Figures from the latest Foxtons’ Letting Market Index show that average weekly rent in the capital in July 2023 was 12% higher than July 2022.
Analysis of London data also showed a 6% increase in new listings compared to the previous year.
Average weekly rent remained stable in July at £597 per week, which was only slightly lower than the £599 per week recorded in June, but 12% higher than July 2022.
Central London continued to command the highest average weekly rent, at almost £680. When comparing 2023 to 2022 year to date, the average weekly rent across London increased 12%, with East London increasing 15%.
In July London saw 7% more instructions than in June, which translates into roughly 2,500 more instructions, and new listings were up 6% when compared to July 2022.
Applicant demand increased 13% from June, as July brought London into peak lettings season. When compared to 2022, July demand was lower, with a 4% decrease year to date and a decline of 15% versus last July.
There was an average of 21 rental applicants per new instruction in July, an 18% increase month-on-month, however a 12% decrease when compared to 2022.
East London saw a 63% increase rising to 26 applicants per instruction, becoming the second highest after South London which has an average of 30 applicants per instruction in July.
Gareth Atkins, Managing Director of Lettings, said:
“As our market research predicted at the start of 2023, price increases in the lettings market are less extreme than we saw last year.
“We’ve seen expected growth and are now into a more consistent busy market we normally see at this time of year. As such, the market will remain highly competitive through summer.”
What a depressing read. Millions of people stuck on a depressing treadmill.
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If Foxtons are increasing their asking rents by 12%-15% and yet they are still receiving between 21 and 26 applications per property, then it sounds like rents could be increased further. Certainly not good news for tenants, but are they doing the best for their Landlords who are also being squeezed by taxation, inflated service charges and soaring mortgage rates? What a mess.
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What a mess indeed. My mind wanders back to the early ’80’s when we had swathes of council housing available. Now, like everything, privatised & what wonderful gains that’s bought us all.
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Strong demand doesn’t necessarily mean tenants can afford to pay more- it primarily shows a simple lack of supply. Whilst, as agents, we have a duty to get the best returns for our clients, we also have a duty of care to place tenants within reasonable affordability thresholds. Leveraging desperation to place tenants who ultimately can’t afford to maintain payments, will not serve any landlord well if an extra £100-250 a month in rent results in a lengthy court action.
We looked at our data a few days ago and saw very much in line with this statement- rents up 12.5%. We aren’t seeing 20+ applicants per property however closer to 10 but all strong and viable enquiries.
Also don’t forget, half of the properties in the PRS have no mortgage, swathes are owned by NRLs and pay tax elsewhere- so whilst some landlords are getting squeezed, many are seeing record-shattering rents with a limited cost base.
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