Right now, it seems just about everyone – in the lettings sector, in the media and across the Capital – is talking about London’s record rent prices. We developed the latest London Lettings Report to examine and explain what’s driving the rent increase and to help navigate this unprecedented market.
Surprising insights for London Landlords
There are many interesting findings in the London Lettings Report – the rise in renewals, the comeback of short lets and the data we’ve gathered around affordability for tenants and landlords. For example:
• “While some landlords are being deterred by increased legislation and costs, those who remain continue to see good income returns.”
• “It is likely that interest rates will rise further this year but they would need to result in a rise in mortgage rates to 6.9%, with no further increase in rents, for landlords to see no rental income after paying mortgage costs.”
Initial thoughts on supply and demand
Not only did Gareth speak at the event, he was also one of the Foxtons experts who sat down with Premier Landlords to answer questions and talk about the market.
Record rents are being driven by multiple factors, but the first place to look is supply and demand. We're registering twice as many new renters in 2022 than in 2019. At the same time, private landlords are reviewing – and a fair few are downsizing – their portfolios in light of the strong sales market.
We first introduced this summer's London Lettings Report in an exclusive event with Premier Landlords. Gareth Atkins, Managing Director of Lettings at Foxtons, set the stage for supply and demand. If we compare the first half of 2022 with the first half of 2021, rent achieved is up 25% year on year. Gareth said, “in lettings terms, that is huge.” However, to put it into perspective, he said we should look at the previous year.
“2019 was on a steady incline,” Gareth pointed out, “And then COVID hit, prices crashed, especially in the first part of 2020 as people stayed put and couldn’t afford rent.” Off the back of all that, we saw rental prices shoot back up, and the supply and demand issues we outline in the report. “Right now, it’s a massive rental price,” Gareth concluded, “but it’s only 13% up on pre-pandemic levels.”
If you are a portfolio landlord looking for support with your investments and the cutting-edge insights we provide to our Premier Clients events – get in touch with our Premier Clients team.
Exclusive insider knowledge
We invest heavily in data to ensure our customers are informed. Michael Grant, Business Analytics Director at Foxtons, said, “Our clients and customers are better prepared to act because they have the information they need, right when they need it. That unique benefit comes from data and technology.”
Foxtons Business Analytics uses cutting-edge technology to get the most out of our vast data sources – our exclusive database has been collated for more than 20 years, making it one of the largest databases of property market information held for London, so the London property information we can provide is second-to-none.