Landlords appear to be returning to the capital, with new instructions in February up 19% year-on-year, according to London estate agent Foxtons, despite being 10% lower than in January.
Tenant demand in February fell by 15% and while South London remains the most in-demand area, it also saw the largest drop in applicants - 21% down on the same period in 2023.
The number of new renters per new instruction in London has been stable since October, remaining between 12 and 14, while a year-on-year fall of 29% indicates a shift in market dynamics as demand reduced and supply increased, says Gareth Atkins, Foxtons’ MD of lettings.
London rental prices fell 2% year-on-year, says Foxtons, but rose 3% compared with January, averaging £561. West London is the only region to see a year-on-year increase, rising from an average of £459 in 2023 to £487.
Landlords must adapt, as simply listing their property is no longer enough to achieve a good return, advises Atkins. “Although applicant numbers remain higher than 2019, we are conducting 23% more viewings in order to secure tenancies.”
Fellow agent Chestertons reports a 125% increase in the number of landlords reducing their asking rents last month, in reaction to shifting market conditions in the capital. It believes rents have dropped by up to 10% in some areas compared with the same time last year.
Its figures show nearly 40% more rental properties on the market than last year and fewer tenants actively looking to move, a combination that is putting pressure on landlords to reduce their prices to secure a tenant and avoid costly void periods.
Adam Jennings, head of lettings, says: “Landlords that have become accustomed to continually rising rents since Covid and aren’t willing to adjust to the current market conditions are increasingly finding themselves with empty properties, a situation which was very rare last year.”
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