The average rental in London hit a record £553 a week last month with almost 30 applicants vying for each property, as landlords cashed in on soaring demand and a lack of new properties coming on to the market in the capital.
The average rental price in September eclipsed the previous record of £549 set in June, according to the latest data from the estate agents Foxtons, with the fight for property sparking bidding wars, “auditions” and landlords demanding six months to a year rent in advance.
On average, 29 renters compete for each property – slightly down on the 33 applicants per new listing in August – the highest levels seen for at least three years.
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“The lettings market in September continued to grow as we hit a new record high for the average rental price,” said Gareth Atkins, the managing director of lettings at Foxtons. “This demand was triggered by huge numbers of new renters looking for property. Students physically returned to London post-Covid, corporate relocations resumed at full pace and rising interest rates persuaded some buyers to continue renting in the immediate future.”
There were 38% fewer new listings year on year in September, and with more than three-quarters of tenants choosing to renew rather than move, the pressure on prices in the rental market is unlikely to abate anytime soon.
Central London remains the most expensive area of the capital with rent up 30% year on year to a record £636 a week last month.
In September, renters spent 101% of their registered budget to secure a property, an increase of 3% compared with August.
The south and east of London experienced the most competition, with 37 applicants per property, while the largest monthly increase was in the north, with 20% more applicants per instruction.
Renters’ average weekly budget was £494 last month, slightly down on the £500 a week recorded in August. However, budgets were 6% higher compared with the same month last year. Central and east London continued to have the highest year-on-year increase, at 12% and 11% respectively.
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“The normal seasonal trends you’d see in the third quarter were taken to their extremes this year,” said Sarah Tonkinson, the managing director for the institutional private rental sector and build to rent at Foxtons.
“August and September are always peak lettings season. Now that we are past the peak, renter demand should relax as it does in the fourth quarter, but I suspect it’ll remain significantly higher than we’d typically see for October. The lack of supply is still making headlines – September’s 23,000 was the lowest level yet in 2022.”
