Latest Foxtons data indicates a normalising market
The number of new instructions in London saw a significant increase in February, rising by 20% compared to the same period last year, according to estate agent Foxtons.
The growth indicates a vibrant activity in the property market, despite a slight 10% decrease from the figures reported in January 2024. Overall, the year-to-date data shows a 19% increase in new instructions when juxtaposed with the same period last year.
Foxtons, however, reported that the landscape of applicant demand tells a different story, with a 15% reduction observed in February 2024, with the downturn pointing to a market that is becoming more balanced than in the previous year.
South London, despite maintaining its position as the most sought-after area, experienced the sharpest decline in applicant numbers, down by 21% from the year before.
The latest Foxtons Lettings Market Index also showed that rental prices in London decreased by 2% on a year-on-year basis. Yet, there was a slight recovery in prices from January to February 2024, with an average increase of 3%, bringing the average rental price to £561.
West London stood out as the only region witnessing a year-on-year increase in rental prices, moving from an average of £459 in 2023 to £487 in 2024.
The market dynamics between supply and demand have also shifted, as evidenced by the stable number of new renters per new instruction, which has been consistent since October 2023, with 12 to 14 applicants per instruction.
This stability, however, comes against a backdrop of a 29% year-on-year decrease, signalling a significant change in market conditions with a growing supply and a reducing demand.
“The London lettings market is adjusting as we predicted, with applicant demand down 15% and listings up 20% compared to February last year,” said Gareth Atkins (pictured), managing director of lettings at Foxtons. “Landlords must adapt, as simply listing their property is no longer enough to achieve a good return.
“Though applicant numbers remain higher than 2019, we are conducting 23% more viewings in order to secure tenancies. Building a competitive pricing strategy and instructing a proactive agent are crucial for a landlord’s success in this evolving market.”
Sarah Tonkinson, managing director of institutional PRS and build to rent at Foxtons, pointed out the regional differences within London’s rental market.
“South London had the highest demand, Central London had the highest budgets and West London was the only region to see a year-on-year increase in average price this February,” Tonkinson said. “Dig deeper, and you’ll find even greater differences within each region.
“Landlords can set their listings apart by understanding and adapting to nuances in their local market. That’s why we leverage real-time data and analytics to optimise our clients’ strategies, keeping landlords competitive within micro-markets.”
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