Annual change metrics (2022 vs 2021)
Foxtons, showing year-on-year change
Supply Demand Rents
SUPPLY
change in new
instructions
-15.4%
-18.5%
-6.8%
-14.0%
AVERAGE RENTS
average rental
price achieved
26.6%
21.2%
16.3%
20.2%
DEMAND
change in renter
registrations
-8.6%
8.8%
38.0%
13.5%
Annual change
-20%
60%
80%
40%
20%
0%
-60%
-40% Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Q2 2022
Q3 2022
Q4 2022
GARETH ATKINS
MANAGING DIRECTOR
LETTINGS
Foxtons Foxtons Foxtons
However, much of this growth is a result of the
unprecedented conditions of the last few years,
with evidence of more stability emerging.
Putting 2022's peak into context of the last few
years, a steady pattern of market growth
emerges. Rents have increased by an annual
compound rate of 4.2% over the past four years.
THE LONDON LETTINGS MARKET IN 2022
SAW HISTORICALLY HIGH DEMAND
LEVELS COUPLED WITH FALLING STOCK,
WHICH RESULTED IN RECORD LEVELS OF
RENTAL GROWTH.
As we enter 2023 with some uncertainty
in the sales market, there are landlords
who will be able to capitalise on this
opportunity and build their portfolio
by purchasing new rental properties at
competitive prices, especially where they
are less impacted by the increased cost of
borrowing. As we expect steadier rental
increases in 2023, London property
remains an attractive investment
proposition.
Increased stability will be welcome news
for renters, but a complete rebalance will
take time. The number of renters registering
per property listed to rent is still among
the highest Foxtons has ever seen. Demand
for rental properties will continue to be
boosted by the rising cost of living
deterring some first-time buyers.
We continue to highlight that the
Government needs to consider this
imbalance in future legislation and support
landlords to remain in, and enter the
market. Foxtons are supporting landlords
with our fully-managed service, and an
eight point increase in uptake during 2022
indicates how many landlords now see this
service as a necessity to help look after
their tenants and keep up to date with
evolving lettings legislation.
While rental growth is expected to stabilise
in 2023, following the record highs in 2022,
all the factors influencing the market mean
rents are likely to continue to rise for the
foreseeable future. However, this will
probably be at the more traditional rate
of plus or minus 5% per year.
STEADIER RENTAL
GROWTH AS MORE
LANDLORDS BENEFIT
FROM A FULLYMANAGED
SERVICE.
The London Report 2023 | London's lettings market 11