Rental rates reached their highest ever weekly price this September as demand continues to surge in London, according to Foxtons.
The estate agency’s research showed that the average rental price in September was £553 per week, breaking June 2022’s record of £549 per week as the highest average rental price ever recorded.
Unsurprisingly, Central London continued to produce the highest average weekly rent this year at £636, a 30% increase on prices seen in 2021.
Gareth Atkins, managing director of lettings at Foxtons, said: “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.
“It meant, in September, 29 applicants registered for every new property brought to the market.
“Combined with this, there were 38% less new market listings than the same time last year.
“With over three quarters of our tenants choosing to renew rather than look for a new property, I don’t expect the pressure of low stock to ease anytime soon.”
It’s true that levels of rental stock remain low, as in September there were just 23,000 new listings, the lowest monthly volume of new instructions year to date in 2022.
The number of new listings year-to-date was 38% lower than the same period last year.
Foxtons’ date also found that despite a seasonal reduction in demand, the market has not shown its typical signs of cooling ahead of Q4.
The South and East regions had the most competition in property demand with 37 applicants per instruction, and the North region saw the largest monthly increase with 20% more applicants per instruction.
Moreover, renters’ average weekly budget was £494 in September 2022, just slightly lower than the £500 per week seen in August 2022.
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.
Sarah Tonkinson, managing director of institutional PRS and build to rent at Foxtons, added: “The normal seasonal trends you’d see in Q3 were taken to their extremes this year.
“August and September are always peak lettings season, but this year, August saw the highest level of demand ever recorded, and average rent broke records in September at £553.
“Now that we’re past the peak, renter demand should relax as it does in Q4, but I suspect it’ll remain significantly higher than we’d typically see for October.
“The lack of supply is still making headlines, as September’s 23,000 new listings was the lowest level yet in 2022.
“From a Build to Rent perspective, there will be an influx of stock in the new year, however, we’ve already got renters registered now looking for their next home.”
