The average property rental price in London has reached an eye-watering record high of £553 per week as landlords take advantage of a chronic lack of supply in available housing stock for tenants.
According to the latest figures from estate agent Foxtons rents rose in September up from the record amount of £549 set in June this year as landlords raised rents.
Supply shortages still dominate in the capital with an average of 29 renters compete for each property with many private landlords expecting bidding wars and six months to a year rental up front from rental applicants.
The figure was slightly down from the 33 applicants per instruction in August, but still higher than anything Foxtons had encountered in the three preceding years.
In September 2022, renters spent 101% of their registered budget, an increase of 3% from August 2022.
Central London continued to produce the highest average weekly rent this year at £636, a 30% increase on prices recorded in 2021.
Gareth Atkins, managing director for lettings at Foxtons, said: “The lettings market in September continued to grow as we hit a new record high for the average rental price.
“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.”
The south and east of the capital saw the most competition with 37 applicants per instruction, and the north saw the largest monthly increase with 20% more applicants per instruction.
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 for institutional private rental sector (PRS) and build to rent, said: “The normal seasonal trends you’d see in the third quarter were taken to their extremes this year.
“Now that we’re 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, 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.”
