The Covid years’ extreme effect on the capital’s lettings market appears to be significantly easing – although demand remains abnormally high.

Data from London agent Foxtons found that the number of new instructions in January was 25% higher than the previous year, with rental prices down by 1% from the same period in 2023, due to increasing supply.

Increase

It reports a 93% month-on-month increase in applicant demand from December to January. While this was 10% lower than in January 2023, compared with January 2019 – the last year of a more traditional market – applicant demand was up 71% last month.

Foxtons says the year-on-year fall of 26% in new renters per new instruction indicates a shift towards a more realistic lettings market, characterised by higher supply levels and less inflated demand. However, applicants per new instructions have increased by 56% from January 2019.

Sarah Tonkinson (pictured), MD of institutional PRS and build to rent, says: “We are not expecting massive price growth across London’s lettings market this year, around 0 and 2%. The market is still competitive…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.”

Gareth Atkins, MD of lettings, adds: “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.”