London lettings returning to ‘balance’, says leading estate agency

A decline in the number of renters and more available stock has returned balance to London’s lettings market, latest data from Foxtons reveals.

The number of new renters in the capital decreased 24% month-on-month in December  with demand 12% lower than in 2022 while overall stock levels in 2023 were 13% higher than in 2022.

MORE BALANCED

The London estate agent says that the year-on-year decrease of 22% in new renters per new instruction shows a shift towards a more balanced lettings market.

While the number of renters per new instruction has decreased across London, figures remain high in South London with 24 renters per instruction, as well as West and East London’s 23 and 22 renters respectively.

Gareth Atkins, Managing Director of Lettings at Foxtons, says: “Our belief is that the 2024 London Lettings market will be a far more traditional market than we have seen since 2020.

“Our expectations are for volumes to rise with seasonality over spring and summer before plateauing in Q4 offering more predictability for renters and landlords despite the General Election on the horizon.”

Foxtons also revealed that the firm has seen a sharp uplift in both the number of sales applicants entering the London market in the last 30 days, as well as the number of viewings being scheduled across the firm’s 50+ branches.

AHEAD OF THE CURVE

Guy Gittins (main picture), Foxtons Chief Executive, adds: “It’s fair to say that as planned, we are ahead of the curve when it comes to delivering the right results for our clients and customers.”

Meanwhile rival Chestertons reports an end of ‘Covid Tenancies’ has boosted the number of available rental properties by 45%.

The agency believes that a large number of three-year tenancies agreed by tenants at lower-than-average rates during the pandemic have now come to an end.

PANDEMIC EFFECT

Adam Jennings, Head of Lettings at Chestertons, says: “At the height of the pandemic, rents dropped considerably and gave tenants the opportunity to secure a property that they might not have previously been able to afford.

“To give both, the tenant and landlord, a greater degree of security during those unsettling months, many of the tenancies agreed were for up to three years.

“These contracts are now coming to an end and many of the properties are now coming back onto the market, giving tenants looking to move a greater choice.”

Chestertons is forecasting a 5% increase in rents across the UK and London in 2024, followed by 3-3.5% in 2025 as the accumulation of new supply begins to soak up demand.