Renter trends point to significant regional and market shifts ahead
The London lettings market closed 2024 on a strong note, according to new data from Foxtons, revealing a 7% annual increase in new market listings in December.
Applicant demand in December 2024 climbed 6% compared to the same month in 2023. However, demand for the full year dropped 3% from 2023 levels, reflecting a slow first half of the year that was 6% behind 2023, followed by a recovery in the second half that ended 1% ahead.
Notable shifts were observed in regional demand across London. Central London saw a 15% annual rise in demand, while West London experienced a 19% decline, indicating changing renter preferences within the capital.
The latest Foxtons Lettings Market Index indicated a stable London lettings market in 2024, with typical seasonal patterns returning and supply increasing across all regions. Many areas posted double-digit growth, with East London leading the way. While affordability remained a key factor, evolving renter preferences influenced behaviour, with demand rising in Central and East London but softening in West and South London.
“Looking at the rental landscape in the year ahead, I expect to see traditional seasonality in the market, similar to 2024,” said Gareth Atkins (pictured), managing director of lettings at Foxtons. “While we’re projecting modest rent growth of 3-5%, the real story will lie in the resilience of supply levels. This will be tested, primarily, by the approaching Renters’ Rights Bill, which should come into effect by the second half of the year.
“Encouragingly, last year’s data did not see drops in available rental supply, even as some landlords took advantage of an increase in sales to evaluate lower-performing assets in their portfolios.”
December 2024 saw a significant 30% month-on-month increase in new renters per instruction, reaching 15 renters per instruction, a 7% rise compared to December 2023. For the year, South London recorded the highest average of 19 renters per instruction, followed by East London at 18 renters per instruction.
Applicant budgets rose 2% in 2024, with South London experiencing the largest increase. Average budgets in the region grew from £493 to £507 per week, a 3% rise.
The average rent in 2024 remained relatively stable, recording a marginal 2% decrease to £569 per week. However, renter spend dipped by an average of 1% compared to 2023, with December 2024 alone posting a 1% month-on-month decline.
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