New data from Foxtons shows that activity in the summer lettings market has started to pick up in the capital.
Despite a 7% decrease year on year, due to lower demand in Q1, Q2 has shown trends similar to Q2 2023. Central London experienced the highest demand, with levels 3% higher year on year. Applicant budgets continued to rise, reaching an average of £547 per month, the highest in recent years and 2% higher year on year. Notably, budgets for one-bedroom flats increased by 5% year on year.
The data shows, renter budgets have remained stable at 99%, meaning they are spending just under budget (100% means renters are spending exactly their budget), since February 2024, which is 1% lower than the year-on-year figure for 2023. In June, Central London continued to see the highest renter spending, with renters averaging 102% of their budgets.
The average number of applicants per instruction increased from 15 in May to 16 in June. The data shows a 17% decrease year on year, the drop from June 2023 to June 2024 is minor, from 17 to 16 applicants. Central London saw a significant 23% month-on-month increase, rising from 11 to 14 applicants per instruction.
There was a slight 4% reduction in listings from May to June, although the number of new instructions to the market was still over 30,000 in June. Year to date, new market listings in 2024 have increased by 8% year on year.
Year on year, rent decreased by 2%, but has remained stable on a month-on-month basis with no significant changes from May 2024. In line with the rising budgets for one-bedroom flats, the average rent for these properties also increased year on year, averaging £467 per month.
On closer examination, there is significant nuance in the local dynamics. Central London is experiencing a more balanced market, while other regions exhibit larger variations in key metrics.
West London for instance has seen a substantial increase in supply alongside a decline in rental registrations. Every patch of the London market has a complex relationship between supply, demand and budget, underscoring the importance of local market insight.
Gareth Atkins, Managing Director of Lettings, said: “The peak lettings season has begun in earnest; our data shows renter demand rose 15% in June, in line with last year’s numbers so far, and it should continue to push upwards through the coming months.
"This means the market will be fast-paced, so renters will need to be prepared and agile to achieve the best results. Partnering with an experienced lettings team can help you to reach high-quality tenants efficiently.”
Sarah Tonkinson, Managing Director of Institutional PRS and Built to Rent, said: “While a focus on traditional housebuilding is anticipated under the new Labour government, the needs of the significant renter population in the UK shouldn't be overlooked.
"Build to Rent presents a compelling solution, particularly in London, with its expansion into diverse areas and price points. These high-quality homes with convenient transport and built-in community features are increasingly attractive to renters. The growing momentum surrounding Build to Rent suggests its potential to be a valuable tool for local councils in achieving the UK's overall housing goals.”
