"There has been a slight seasonal decline in demand, which is usual at this time of year, alongside an unusual, marginal increase in supply."
The London rental property market began to cool in November, in line with its normal, seasonal trend for winter months, according to new figures from Foxtons.
November followed the seasonal downward trend with a 26% reduction in renter registrations from October. However, year to date, demand remained 15% higher than the same period last year. The outer zones of London continued to show higher levels of renter demand, particularly prominent in South and West London, where renter registrations were up 34% and 54% respectively compared to 2021.
In November, the average rent price was £551 per week, the third straight month that average rents have been £550 or more. Whilst this represents a 3% month-on-month decrease, this price is still 20% higher year on year.
There were 15 renters competing for every new property this November, a 31% reduction compared with October, but still 35% up on the prior year. For the first time in over two years, this figure was lower than the same month in the prior year.
Competition remained high in South London with 31 renters per new instruction, while the East and West regions followed with 28 renters per new instruction.
As applicant demand fell, so did the budgets of potential renters. Despite a 1% month-on-month decline, applicants had already adjusted their mindsets to expect higher rents, with budgets still 7% higher year-on-year. Central and East London continued to have the highest year-on-year increase, at 12% and 10% respectively this November.
On average, renters spent 100% of their rental budget in November. This is 1% lower in comparison to October 2022, but 3% higher than the same month in 2021, where renters were spending under their budgets to secure tenancies.
Gareth Atkins, managing director of lettings, said: “With so much debate on rising rent prices, cost of living, mortgage rates and supply shortages, all eyes are on the London Lettings market. There has been a slight seasonal decline in demand, which is usual at this time of year, alongside an unusual, marginal increase in supply. There were 15 new renters competing for each new listing this November, which is a 31% reduction from October but still represents historically high demand. In line with a little more property available we have seen rental prices stall, but there’s still a long way to go before we see rent prices move away from recent record highs.”
Sarah Tonkinson, managing director of institutional PRS and Build to Rent, said: “In a usual year, landlords typically avoid putting property on the market around November, as renters are less active right before the holidays. But in a year that’s broken all the rules, we’re happy to see a 7% uplift in new listings this November. Along with a 26% reduction in renter applications, this may start to relieve some of the pressure in the market, although demand is still 15% higher year to date compared to 2021 and supply is 3% lower than November 2021, so the imbalance is still there.”
