Pricing and value will remain key to London’s lettings market’s continued momentum, according to Foxtons Lettings Market Index. 

It says that although renter demand remains below last year’s level, with registrations in March 10% lower year-on-year, activity increased month-on-month. While many report landlords leaving the market, Foxtons said supply rose 11% between February and March in the capital, offering renters greater choice. 

Meanwhile, year-on-year new listings rose 4%, with the sustained increase keeping overall supply levels ahead of last year. 

More balanced conditions 

Foxtons believes that current trends point to a gradual shift towards more balanced conditions, as rising supply helps ease pressure on renters while demand continues to rebuild steadily.

As supply has improved, the competition for rental properties has also eased, with new renters per instruction down 9.4% year on year. On a month-on-month basis, Foxtons said the metric softened slightly again, suggesting that while demand increased, higher levels of supply are giving renters more choice.

Stable renter budgets

Renter budgets have remained stable, averaging around £542 per week year-to-date to the end of March, a slight increase year-on-year and largely unchanged on a month-on-month basis. 

However, Gareth Atkins, managing director of lettings at Foxtons. said that pricing will continue to be vital, especially as RRA comes into force. “As competition between landlords builds, pricing matters more than ever. Under RRA, you cannot accept offers above your asking price, so landlords need to be confident that asking prices reflect real demand in their local market. For well-presented homes priced sensibly, we expect activity to remain steady, with tenants willing to commit longer-term where they see value.”