Lettings Report - Lettings Market Report October 2022

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It's another record month for rental prices in London, particularly in Central London where prices are

almost 30% higher than 2021. Increasing interest rates are likely to have a significant impact on the

property market, as renters who would have migrated to the sales market as first-time buyers will now be

more cautious and stay in their rental properties, which has the potential to further reduce the supply of

rental properties on the market. Rising interest rates will also impact landlords with mortgages and their

increasing costs could be passed onto renters, which will put further upward pressure on rental prices.

• Average rental prices have reached a new record high of £571 per week, breaking the

previous record of £553 per week in September 2022 - a 4% uplift month-on-month.

• There were 22,000 new listings in October 2022, which is the lowest monthly volume so far this

year, and year to date instructions are 30% below 2019 levels.

• For the second month in a row in 2022, we are seeing renters spending over their budgets to

secure a property. In October 2022, renters spent 101% of their registered budget, a 3%

increase compared to October 2021.

Foxtons Lettings Market Report

Foxtons - Lettings Market

Contact

PHONE

+44 (0)20 8636 4605

~ Gareth Atkins, Managing Director of Lettings

Throughout our front offices and within our renewals team, October has proved to be a very busy month. Competition

for London lettings is intense. Average rent prices have reached a new record at £571 per week, and we're seeing a return

to renters spending over their registered budget at 101% on average (a number we haven't seen since before the

pandemic). One reason for the competition is the rising interest rates, as renters who were considering homeownership

are now looking to renew or find their next rental. Another reason is the sheer lack of supply. October saw the lowest

monthly volume for new listings year to date. With rapidly expanding government regulations and the highest single lift

in interest rates the UK has seen in years, landlords have a lot more to factor into their business plans going forward, so

we're likely to see these unusual trends continue further into Q4.

~ Sarah Tonkinson, Managing Director of Institutional PRS and Built to Rent

The lettings market usually follows a set pattern with August and September as the busiest months of the year,

followed by a quiet Q4. However, this October's £571 average rent prices actually surpassed September's record high,

which is a huge departure from the normal trend. Typically, Londoners don't want to move house around the holidays,

and we often help negotiate different tenancy lengths between landlords and tenants, like 15 months instead of 12, to

avoid properties coming on the market this time of year. Instead, there were 22 applicants per new listing last month,

which is higher competition in October than we've seen even pre-pandemic in 2019. We mentioned, in previous

Lettings Market reports, that this might be an unusually busy Q4, and so far, it's turning out to be absolutely true.

PHONE

+44 (0)7773 816 498

PHONE

+44 (0)20 7766 1230