London Rents Jump 5% in a Single Month, and are 23% Higher Than a Year Ago

New figures today from London agency Foxtons show that the average rent in February 2023 rose five per cent from the previous month, reaching over £570 per week, which exceeded the highs of the peak lettings season last summer.

Rental prices in Central London were higher than other areas of London and 23 per cent higher year-on-year this February.

Continued demand in the lettings market was highlighted by the six per cent increase in competition for each new instruction last month, rising to 20 renters per instruction. South and West London had the highest number of renters competing for every new instruction – 29 and 31 respectively.

The number of properties coming to the market in February was down five per cent compared to January, and four per cent down year to date compared to last year, according to Foxtons analysis of Zoopla data. 

The Central London boroughs of Westminster and Tower Hamlets had the highest concentration of new lettings instructions coming to market, as supply remained tight.

Foxtons found that applicant registrations in February were down seven per cent compared to January 2023, and down one per cent compared to 2022 year to date. So far in 2023, South and West London have proved to be more popular compared to last year, with applicant registrations up 16 and 30 per cent respectively.

Foxtons data found that average budgets for applicants remained flat, with just a one per cent reduction compared with the previous month. However, applicant budgets were still per cent higher compared to 2022 year-to-date, with renters understanding and adjusting to the financial requirements of the current lettings market. 

Gareth Atkins, managing director of lettings at the agency, says: “Considering how 2022’s prices climbed through the latter end of the year, we did expect higher prices in Q1. February’s unseasonable rise in average rent price, higher than last year’s record-breaking peaks at over £570 per week, is a strong indicator of how intense the imbalance is between supply and demand in the London market. 

“This month, we’ve seen many more tenants choosing to extend their lease, so those properties aren’t coming back onto the market. 

“At the same time, we’ve found a remarkable increase in corporate searches as businesses take the opportunity of favourable currency rates to invest in new London offices, raising demand.”