We’re wrapping up 2022 with a market overview from our sales and lettings teams. It's been an unusual year in property, with plenty to say about both sales and lettings. Read up on the market to help plan your 2023 property goals in the Big Smoke.
The London Lettings Market in 2022 | The London Sales Market in 2022
The 2022 London Lettings Market
With people flooding back to the Capital, demand soared in 2022. Although uncertainty started seeping into the UK economy, it seemed like nothing could slow the appetite for London living. That’s why we saw multiple record-breaking statistics this year.
Driving demand
Demand was remarkably high throughout 2022. Students are always a big part of the London rental market, and this year, students at London universities were able to resume their in-person classes. There were record breaking numbers of international students. Corporate relocations also started up again in earnest. Rising interest rates convinced would-be first-time buyers to remain renters for a while longer.
The strain on supply
Meanwhile, there has been a noticeable lack of new listings in the market this year. As we found in the Foxtons Autumn/Winter Letting Report, 11% of landlords sold their property at the end of tenancies in 2022, 55% of tenants coming to the end of their tenancy chose to renew , and 24% of renters signed 2+ year leases – up from 12% in 2019. The lack of stock boosted competition within an in-demand market, and the lettings market began to make headlines.
Q4 (October, November and December) is typically quiet on the lead up to Christmas. This year, however, it’s remained significantly busier than normal. 2023 may be a less dramatic market, but with low rental stock, we wouldn’t count on it.
Key statistics:
- August arrived with the highest level of renter demand that we’d ever recorded in the London lettings market. Considering August 2021 was the highest level of demand for that year, it was surprising to see August 2022’s demand reach 19% higher.
- New listings in the London market remained lower than the previous years all the way through November 2022. This remarkable lack of stock is hugely important to understand the condition of the London rental market, because with less stock, competition intensified, and so did rent prices.
- The average rent price was a huge topic in the 2022 market because increasing competition put intense upward pressure on it. Jaws dropped when it broke records in April, then again in each summer month. By September, it was the highest we’d ever recorded, yet in October, a month that typically marks the start of the quieter season in London, average rent prices broke the record once again, at an unbelievable £571 per week.
Our top 2022 articles for renters:
- Moving London: Let's find you a rental
- Best areas to live in South West London
- Spring clean: tips for a tidy flat to protect your deposit
Our top 2022 articles for landlords:
London Sales in 2022
Whenever there are dramatic rises and falls in the UK housing market, London is the slowest to change. Homeownership in the Capital has this unshakable local, national and global appeal, which insulates it. Whilst London only accounts for 9% of the UK's property sales transactions by volume, it accounts for 19% of the total value.
The wind up
In 2021, when pandemic restrictions started to relax and we saw the looming end of Help to Buy, buyers leapt into action. Motivation continued to grow through 2022. In fact, the market saw its highest levels of exchange volumes since 2017 this year. So, when you hear that 2022 was a sellers’ market, it’s because there were so many serious buyers looking to achieve their property goals.
The slowdown
A slowdown started in the UK this Q4 (October, November and December). In response to mounting political and economic pressures, buyers paused to reassess their timelines, and house prices began to fall. London’s house price growth is falling a lot slower than the rest of the UK – resilient as ever in its international and prime appeal.
The new year
Looking forwards, it might not be the hyper-active sellers’ market that it was in 2022. Without such intense buyer interest:
- Sellers will need to focus on preparation to keep their timeline on track. Because affordability will affect some areas of London more than others, it's going to be important to find a reliable agent with local expertise and the capacity to show buyers and renters more of London.
- We still see quite a few motivated, needs-based buyers who are ready to transact. Although larger political and economic concerns will be on buyers' minds, competition may not be as fierce in the 2023 market, which will help in making an offer. Mortgage rates, which spiked due to September’s Mini Budget, have now begun to cool and may continue to do so into the new year, which will support buyer affordability.
- The conclusion of Help to Buy in October, which hasn’t been replaced by any incentive, will influence first-time buyers and land developers.
Our top 2022 articles for buyers:
- Making an offer: how to negotiate when buying a home
- Mortgage rates, the Autumn Budget and a sigh of relief for homebuyers
- Could energy efficiency sway buyers towards new-build homes?
Our top 2022 articles for sellers:
- Foxtons Auctions: your sale (or purchase) faster
- The documents you need to sell a house
- The most wonderful time of year...to start a property sale
With the new year, new opportunities will arise in the lettings and sales markets.
Buyers and renters can get started by registering for a My Foxtons account. If you're registered, we can let you know as soon as a matching property hits the market, so you can book your viewing before the rush.
Sellers and landlords should start with a property valuation. One of our local experts will answer any questions you have on the area, the market, the sales and lettings process and what Foxtons can help your property can achieve in 2023.
More to explore...
2022 was an eventful year in London and the property market. Missed anything? Catch up with the 2022 roundup: highlights from our articles.
