The latest data from London-based agency Foxtons reveals a 19 percent increase in applicant demand during June, marking the peak of the lettings season in the capital. This aligns with trends observed in the previous year, where applicant demand remained relatively stable compared to June 2022. However, in contrast to the general trend, both the South and West London regions experienced higher year-on-year applicant demand, with South London seeing a seven percent increase year-to-date.
According to Foxtons, the average weekly rent has decreased by two percent compared to May 2023, now standing just below £600. Central London retains the highest average weekly rent at £680, 21 percent higher than North London’s second-highest average of £560 per week.
Nonetheless, average weekly rental prices are still 12 percent higher than June 2022. While supply and demand dynamics appear more predictable as summer approaches, the market continues to face an underlying imbalance, with a shortage of rental properties leading to fierce competition and driving up rental prices.
The average rental budget rose by two percent month-on-month to £529 per week, an eight percent increase from the previous year. Average budgets in Central London reached £572, showing a six percent rise from June 2022. However, East London saw the most significant year-on-year increase, with budgets up by 12 percent.
During June, the market experienced a 10 percent rise in new property listings compared to May, following the typical lettings season trend. Foxtons’ analysis of Zoopla data revealed nearly 35,500 new listings in June 2023, over 4,000 more than the previous June. Westminster and Tower Hamlets accounted for more than 20 percent of new instructions so far this year.
The ratio of new renters per new instruction decreased by five percent compared to the previous month and nine percent compared to the previous year. However, with 17 renters per new instruction, this was only slightly lower than June 2022, where Foxtons observed 18 renters for every new instruction. Central London was the only region where renter demand increased, rising by a percentage in June. Nevertheless, West and South London continued to show the highest levels of demand, with both regions having 25 renters per new instruction.
In 2023, there was a noticeable decrease in the percentage of rental budgets spent to secure a property, marking the first decline of the year.
On average, renters spent 99 percent of their budgets, showing a three percent increase compared to the previous year.
According to Sarah Tonkinson, a spokesperson from Foxtons, although London witnessed a significant increase of over 4,000 new listings compared to last June, addressing the growing demand for homes, there is already a surge in demand, with a 19 percent rise in June alone. With the traditional summer peak in August and September, fierce competition is expected this year. To sustainably attract talent to the workforce and public sectors from across the country and around the globe, more supply is required now, along with strategic homebuilding in the coming years.
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