"Supply and demand have hit similar levels to 2022, and we’re beginning to see savvy renters register their search in advance of the summer rush"
Foxtons analysis of London data shows the number of properties brought to the market rose in March, with listings up 19% compared to the previous month. This influx of instructions took the total to around 30,000, up from volumes of around 25,000 seen in previous months.
Whilst still below pre-pandemic levels of stock, the additional instructions are a step towards a better balance between supply and demand. The boroughs of Westminster and Tower Hamlets continued to have the highest concentration of new lettings instructions coming to market.
Overall, monthly volumes in the first quarter of 2023 followed a similar pattern to 2022, with South London remaining the most popular area for renters; year-to-date in March, applicant registrations were up 11% from last year, considerably higher than any other area in London.
Applicant demand remains strong and rose 4% from February to March, with demand reaching similar levels as in March 2022, just a slight 1% decrease year to date.
However, due to a rise in new instructions, the ratio of 17 new renters per new instruction in March was 17% lower than the previous month and 7% lower year-to-date. The number of renters competing for each new instruction decreased in all areas of London year-on-year, except for West London, which grew 14%.
The introduction of the Elizabeth Line might factor into the level of competition, opening up opportunities for renters to achieve their desired commute from a West London property into Central London offices.
The effect of higher stock levels has had some impact on prices, with the average weekly rent down 4% compared to last month. However, rental prices were still 14% higher compared to 2022 year-to-date. East London had the highest year-on-year increase in average weekly rents, at 17% compared to last year, with Central and South London following closely at 16%.
Foxtons data showed that in March, the average budget for applicants remained high. It increased by 1% compared to February 2023, and 8% year-to-date compared with 2022. Applicants looking to rent in North and East London increased their budgets the most compared to last year, at 14% and 13% respectively.
On average, renters spent 100% of their budgets to secure a property in March, which was 3% higher year-on-year, with no change compared to February. Renters looking to rent in Central London had to spend over budget at 101%, whilst other areas of London remained within renter budgets.
Gareth Atkins, Managing Director of Lettings, said:
“At the beginning of the first quarter, we said the market would show the same strength as last year’s first quarter, but it would climb through 2023 at a much steadier rate, requiring renters to remain vigilant as stock comes to the market out of season. At the close of the first quarter, this prediction is right on track. Supply and demand have hit similar levels to 2022, and we’re beginning to see savvy renters register their search in advance of the summer rush.”
Sarah Tonkinson, Managing Director of Institutional PRS and Build to Rent, adds:
“Over the last few years we have seen both extremes in the lettings market – firstly in the post-lockdown market, with its high supply and great deals for renters, and then the 2022 market, with rapidly rising rents due to unprecedented demand and an incredibly low supply – which shows that no market lasts forever.
"It’s important to know or have someone on your side who understands all the intricacies of the market that you’re currently letting a property, finding a rental or renewing a tenancy in. It’s also important to get started early this year. Demand rose 4% in March while new listings rose 19%, as the London lettings market gains momentum.”