London rental market shows signs of revival as tenant demand rises 12% in April

Tenant demand in London’s rental market increased by 12% in April compared to March, according to data released by Foxtons, the city’s largest lettings and sales agent. This marks the first rise in demand since January, indicating a potential improvement in market sentiment.

Despite a 10% decrease in demand year-to-date compared to 2023, April saw a 6% year-on-year increase. The seasonal upturn and higher supply earlier in the year, which reduced competition, have encouraged renters to act.

Average rental prices rose by 3% in April, aligning with figures from 2023. The current average rental price in London stands at £555. There has been an 11% increase in new market listings since the start of 2024, though April 2024 had the same number of new listings as April 2023. Foxtons anticipates prices will remain stable over the next quarter.

The average number of new renters per instruction has remained steady at 14 throughout 2024, a 22% drop from the previous year. South and West London recorded the highest numbers, with averages of 19 and 18 renters per instruction, respectively.

Applicant budgets have also seen a 3% increase year-to-date compared to 2023. West London has the lowest average applicant budget at £481, a 4% year-on-year increase, while Central London continues to have the highest, averaging £580.

Gareth Atkins, managing director of lettings at Foxtons, said: “The first quarter of 2024 saw a significant influx of new properties compared with 2023 and as such, less renters per property – or in broad terms, competition.

“One of the knock-on effects of that was a stagnation of average prices, which we predicted in January. Early data from Quarter 2 has seen not only that supply slowed but also the return of 2023 levels of applicants which, if it continues, would indicate a stronger rental market.”

Sarah Tonkinson, managing director of institutional PRS and built to rent at Foxtons, added: “The spring market has definitely sprung into action, and registrations for build to rent are coming in thick and fast.

“Foxtons’ build to rent portfolio is already seeing a significant increase in under offer and exchanged leases compared to the same period last year.

“This time of year applicants commence their searches in earnest buoyed by the lighter evenings and better weather. Students want to secure a lease for September before they leave for summer.”