The London rental market is buzzing with activity as we kick off 2024, showing signs of a more balanced and accessible market for renters and investors alike. With a significant increase in the number of rental properties available and a slight dip in rental prices, here’s everything you need to know about the current state of the market.

The start of 2024 has seen a 25% increase in the number of properties available for rent compared to January last year, according to the latest figures from Foxtons. This increase in new instructions means there are more options on the table for potential renters, marking a notable shift towards rebalancing the market.

Demand Takes a Diverse Turn

While the overall demand for rental properties in London has seen a slight decline of 10% from January last year, the market remains vibrant and dynamic. The end of 2023 into the start of 2024 experienced a dramatic 93% month-on-month increase in applicant demand, a seasonal trend that underscores the market’s resilience. Despite the year-on-year dip, the demand is significantly higher (71%) than in January 2019, indicating a continued interest in London’s rental offerings.

Rental Prices Reflect New Reality

The average rental price in London has seen a modest reduction of 1% in January 2024 compared to the same time last year, with the average rent settling at £544. Central London remains the most sought-after location, boasting the highest average rent at £627. This slight decrease in rental prices can be linked to the increased supply, giving renters more bargaining power and options.

Regional Highlights

Foxtons’ analysis reveals varied trends across London, with new instructions and renter registrations fluctuating across different regions:

• Central London remains a hot spot with a 21% increase in new instructions and a more stable demand.
• North London shows the most significant increase in supply with a 41% jump, coupled with a relatively stable demand.
• West London sees a substantial increase in supply (34%) but faces a sharper decline in demand (-26%).

Expert Insights

Gareth Atkins, Managing Director of Lettings at Foxtons, emphasises the importance of staying informed and adaptable in this evolving market. With properties moving quickly and the market dynamics varying by location, effective strategies and timely market analysis are crucial for landlords.

Sarah Tonkinson, another leading voice at Foxtons, said, “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 – which we consider to be the last year that there was a more normalised lettings market. 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.”