According to the latest research from leading letting agents Foxtons, the rental market in the capital has experienced a slight decrease in prices alongside an increase in property availability. This news comes as a slight relief for renters who have been dealing with the challenges of London’s rental market.

Foxtons’ findings reveal a modest 1% decrease in rental prices in January 2024 when compared to January 2023. This minor dip in prices is largely attributed to an increasing supply of rental properties on the market. As of the start of the year, the average weekly rent in London was £544, while central London saw a slightly higher average of £627 per week.

Demand Dynamics

The report highlights a significant 93% month-on-month increase in applicant demand from December to January, a pattern that aligns with the seasonal trends typically observed in the lettings market. Despite this surge, demand was still 10% lower than in January 2023. However, when compared to January 2019, which is considered the last year of a “traditional” market, applicant demand in January 2024 surged by an impressive 71%.

Sarah Tonkinson, Managing Director of Institutional PRS and Build-to-Rent at Foxtons, commented on the market’s competitiveness, noting, “We are not expecting massive price growth across London’s lettings market this year, around 0 and 2%. The market is still competitive; January 2024 had 56% more applicants per new instruction than in 2019.”

The Landlord’s New Playbook

With the rental market showing signs of a return to normalcy, landlords are advised to adopt a more active approach to pricing and marketing their properties. The increased supply offers an opportunity, but to capitalise on it, landlords will need to work closely with agents to efficiently place tenants and minimise any void periods between occupancies.

Shifting Towards Realism

The 26% year-on-year decrease in new renters per new instruction signals a move towards a more balanced and realistic lettings market, characterised by higher supply levels and less inflated demand. Gareth Atkins, Managing Director of Lettings at Foxtons, emphasises the importance of landlords adapting their strategies to the changing market conditions. He advises, “As new properties come to the market, it will be important for landlords to keep track of how that affects their assets.”