New data released by Foxtons today reveals positive news for investors in London's property market. Average weekly rental prices in May have surpassed the peak of 2022, experiencing a notable 8% increase from the previous month.
During May, the average weekly rent in London exceeded £600, marking an 8% surge compared to April and an impressive 13% growth year-on-year. While Central London maintained its position with the highest average weekly rent, East London demonstrated the most significant year-on-year increase, reaching 18% compared to May 2022.
Foxtons' analysis of London's data highlights a significant uptick in market activity as we enter the bustling summer lettings period. New property listings saw a remarkable 22% surge from April to May, while applicant demand experienced an even more substantial increase of 31% during the same period.
Registrations remained relatively stable compared to the previous year, but Foxtons observed a notable 8% rise in registrations in South London and an impressive 13% increase in West London year-to-date compared to the previous year.
Applicants looking to rent in London increased their average rental budget by 2% from April to May. Notably, those seeking rentals in North and East London exhibited the highest increase, allocating budgets that were 12% higher than the previous year.
In a noteworthy trend, the percentage of the budget that renters are willing to spend to secure a property increased for the first time in three months, reaching an overall average of 102%. In May 2023, renters in Central London spent 108% of their registered budget, experiencing a 7% increase compared to April 2023.
Foxtons' data also revealed that the ratio of new renters per new instruction rose by 8% from April to May, while competition decreased by 5% year-on-year. West and South London remained the most competitive regions, with 27 renters per each new instruction year-to-date, indicating a 9% increase compared to the previous year in West London.
Gareth Atkins, the managing director of Lettings, commented on the trends, stating, "We are seeing demand and supply returning to a more traditional cycle, similar to the pre-Covid era. The significant difference now is that even with the increase in available properties to rent in May, applicant demand continues to exceed supply. This is partly due to the usual summer influx of university students, corporate relocations, and families moving during school holidays, combined with the fact that supply levels have never fully recovered to pre-Covid levels. The increase in the number of renters registering per each new instruction in May indicates the competition that lies ahead."
Sarah Tonkinson, the managing director of Institutional PRS and Build to Rent, expressed optimism for the upcoming summer lettings rush, stating, "With key metrics reaching similar levels to last year, we know we're in for another busy summer. May witnessed a 22% increase in new listings, yet renter demand is already surpassing supply. Weekly rent prices have exceeded £600, breaking records once again, and market participants will closely monitor this metric as we approach the peak season."