The figures from London estate agent, Foxtons, also revealed that Central London continued to produce the highest average weekly rent this year at £636, a 30% increase on prices seen in 2021.
Levels of rental stock remain low and in September there were just 23,000 new listings, the lowest monthly volume of new instructions year to date in 2022. The number of new listings year-to-date was 38% lower than in the same period last year.
The data finds that despite a seasonal reduction in demand, the market has not shown its typical signs of cooling ahead of Q4.
Demand remained high, with an average of 29 renters competing for every new property in September. This was slightly down from the 33 applicants per instruction in August, but still higher than anything Foxtons saw in the three preceding years. The South and East regions had the most competition with 37 applicants per instruction, and the North region saw the largest monthly increase with 20% more applicants per instruction.
Renters’ average weekly budget was £494 in September 2022, just slightly lower than the £500 per week seen in August 2022. However, budgets were 6% higher compared with the same month last year. Central and East London continued to have the highest year-on-year increase, at 12% and 11% respectively.
Foxtons data also found that there was a notable increase in the proportion of budget that renters were willing to spend to secure a property. In September 2022, renters spent 101% of their registered budget, an increase of 3% from August 2022.
The largest monthly increases were in the Central and West regions of London, where the proportion of applicant budget spent was 4% higher in September 2022 than in August 2022.
Gareth Atkins, Managing Director – Lettings, said: “The lettings market in September continued to grow as we hit a new record high for the average rental price. This demand was triggered by huge numbers of new renters looking for property: students physically returned to London post-Covid, corporate relocations resumed at full pace and rising interest rates persuaded some buyers to continue renting in the immediate future. It meant, in September, 29 applicants registered for every new property brought to the market.
"Combined with this, there were 38% fewer new market listings than at the same time last year. With over three-quarters of our tenants choosing to renew rather than look for a new property, I don’t expect the pressure of low stock to ease anytime soon.”
Sarah Tonkinson, Managing Director - Institutional PRS and Build to Rent, adds: “The normal seasonal trends you’d see in Q3 were taken to their extremes this year. August and September are always peak lettings season, but this year, August saw the highest level of demand ever recorded, and average rent broke records in September at £553. Now that we’re past the peak, renter demand should relax as it does in Q4, but I suspect it’ll remain significantly higher than we’d typically see for October.
"The lack of supply is still making headlines, as September’s 23,000 new listings were the lowest level yet in 2022. From a Build to Rent perspective, there will be an influx of stock in the new year, however, we’ve already got renters registered now looking for their next home."
