Rental prices in the capital also see declines
There was a significant increase in new property listings in the London lettings market in January 2024, with figures showing a 25% rise compared to a year ago, estate agent Foxtons has reported.
This surge in new instructions, Foxtons noted, is part of a trend that began in 2023, indicating a robust start to the year for London’s property market.
The data also showed a 93% increase in applicant demand from December 2023 to January 2024, a typical seasonal pattern for the lettings market. Despite this month-on-month growth, demand in January 2024 was 10% lower than in the same period last year. However, compared to pre-pandemic 2019, demand has increased by 71%.
Despite the growing demand and increased listings, rental prices in London experienced a slight decline of 1% in January 2024 compared to the previous year. This decrease in rental prices is attributed to the rising supply of rental properties.
According to the Foxtons January report, the average rent in London at the start of the year was £544, with Central London properties commanding the highest average rent of £627, underscoring its premium position in the rental market.
“As forecasted, the start of 2024 has seen a more normalised lettings market, and as new properties come to the market, it will be important for landlords to keep track of how that affects their asset,” said Gareth Atkins (pictured), managing director of lettings at Foxtons.
“The London lettings market can move quickly and be very localised, so a good agent providing timely market analysis and adjusting the strategies accordingly will help to attract the right qualified tenants.”
Read more: Foxtons grew market share in 2023
Sarah Tonkinson, managing director of institutional PRS and build to rent at Foxtons, projected modest growth in London’s rental prices for the year, anticipating increases between 0% and 2%.
“The market is still competitive; January 2024 had 56% more applicants per new instruction than in 2019 – which we consider to be the last year that there was a more normalised lettings market,” Tonkinson said. “So while there is opportunity, landlords may need to take a more active approach to pricing and work with agents to place tenants and minimise void periods.”
The overall market analysis points to a transition towards a more balanced lettings market, with a 26% year-on-year decrease in new renters per new instruction. This shift suggests a move away from the inflated demand of previous years, aligning with higher supply levels and setting a tone for a more realistic market outlook in 2024.
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