Analysis from Foxtons shows that the spike in applicants was in line with trends seen last year, with demand broadly flat compared to June 2022. Contrary to the overall trend, applicant demand in both the South and West regions was higher, year on year, with demand in South London up 7% year to date.
Foxtons found that average weekly rent has dipped slightly (2%) compared to May 2023, now sitting just below £600. Central London continued to have the highest average weekly rent at £680, 21% higher than North London, which held the second-highest average at £560 per week.
However, average weekly rental prices are 12% higher than June 2022. Despite supply and demand dynamics looking more predictable as summer approaches, the underlying imbalance in the market remained high, with a shortage of rental stock causing intense competition for properties and underpinning higher rental prices.
The average rental budget increased 2% month-on-month, reaching £529 per week, and was up 8% year-on-year. Average budgets reached £572 in Central, 6% higher than in June 2022, but East has experienced the highest year-on-year increase with budgets up 12%.
In June, the market showed a 10% increase in new listings compared to May, in line with typical lettings seasonality. June 2023 saw almost 35,500 new listings, which was over 4,000 listings more than last June, according to Foxtons’ analysis of Zoopla data. Over 20% of new instructions, year to date, were within Westminster and Tower Hamlets.
In June the ratio of new renters per new instruction was down 5% month-on-month, and down 9% year-on-year. However, at 17 renters per new instruction, this was only slightly down in June 2022 when Foxtons saw 18 renters for every new instruction.
Central was the only region where renter demand increased, up 9% in June. However, West and South continued to see the highest levels of demand, both having 25 renters per new instruction.
The percentage of rental budgets spent to secure a property fell for the first time in 2023. Renters spent 99% of their budgets on average, a 2% decrease from May. This was up 3% year-on-year. Although renters in Central London continued to spend the highest proportions of their budgets to secure a property at 103%, Central actually saw the largest decrease in renter spend, month on month.
Sarah Tonkinson, Managing Director of Institutional PRS and Build to Rent, said: “While London saw over 4,000 more new listings than it did last June, partially addressing the fast-growing need for homes, demand is already on the rise – 19% up month on month in June – and August and September mark the traditional summer peak. There will be fierce competition this year. We’ll need more supply now, as well as strategic homebuilding in the coming years, to continue to draw talent into our workforce and public sectors from across the country and around the world.”
