LET
Demand
The forces of demand all point to growth.
The new student extension visa has
boosted the number of overseas renters,
corporate lets have recovered as workers
return to the office, and overall, new
renters continue to arrive in London at
a far greater rate than they leave.
Alongside returning demand, living trends
are changing, with more people living in
single or smaller households over the
past nine years.
Supply
Supply is under acute pressure.
Contracting household size means
London needs more homes for even the
same number of renters. At the same
time, a rise in renewals and longer leases
are reducing churn. It is exacerbated as
existing landlords continue to sell due
to unfavourable policy, leaving portfolio
landlords and the Build to Rent sector
to address the shortfall.
London Lettings Report Autumn/Winter 2022 | Drivers of resilience 5
11%INCREASE IN
RENEWALS
COMPARED
TO 2021
(JAN TO AUG)
24%RENTERS SIGNED
2+ YEAR LEASES
IN 2022,
UP FROM 12%
IN 2019
55%COMING TO THE END
OF A TENANCY
CHOSE TO STAY IN
THEIR RENTAL HOME
IN 2022
RENTERS
SIGN FOR
1MONTH MORE
THAN IN 2021
ANNUAL INCREASE IN RENEWALS
% OF LANDLORDS SELLING WHEN TENANCY ENDS
LENGTH OF LEASE SIGNED
BUILD TO RENT COMPLETED HOMES
KEY STAT SCALE
Foxtons
Foxtons
Foxtons, DRMA (new leases and renewals)
BPF, Savills, Molior
Increase
Landlords selling
Rental length Initial lease length
Homes
higher lower
higher lower
higher lower
higher lower
Range
Range
Range
Range
Outlook
Outlook
Outlook
Outlook
Foxtons
Foxtons
DRMA
Foxtons
BPF, Savills,
Molior
BPF, Savills,
Molior, DRMA
DRMA
Property Academy survey
INCREASED RENEWALS
LANDLORDS EXITING
LONGER TENANCIES
GROWTH IN BUILD TO RENT
• LESS CHOICE ON OPEN MARKET
• INCREASE IN NUMBER OF LANDLORDS SELLING
• MORE SECURITY
• RENT RISES MORE MANAGEABLE THAN NEW TENANCY
• RATE OF GROWTH SLOWING
• RENT RISES MORE MANAGEABLE THAN NEW TENANCY
• RENEWALS AND NEW TENANCIES SIGNING FOR LONGER
• STILL SMALL PART OF CURRENT RENTAL MARKET
SUPPLY
2016
2019
2018
2021 2020
2023
2017
2020
2019
2022
2021 2022 2023
40%
14%
-20%
0%
0%
6%
8%
12%
10%
4%
2% Q1
20
Q1
22
Q3
20
Q1
21
Q2
20
Q2
20
Q2
19
Q2
18
Q2
22
Q2
22
Q3
22 Q4
22
Q4
22
Q1
23 Q2
23Q2
23
Q3
23 Q4
23
Q4
23
Q4
20
Q4
20
Q4
19
Q4
18
Q2
21
Q2
21
Q3
21 Q4
21
Q4
21
2.0
50k
0
5
10
15
0
10k
20k
30k
40k
11%OF LANDLORDS
SOLD PROPERTIES
AT THE END OF
THE TENANCY
IN 2022
18%GROWTH IN BTR
HOMES IN LONDON
SINCE Q2 2021
CURRENT PIPELINE
WILL RESULT IN
1 IN 10PRIVATE RENTED
HOMES BEING BTR
LANDLORDS WITH
6+ PROPERTIES ARE
MOST LIKELY TO
EXPAND THEIR
PORTFOLIOS
IN 2023