London rents slide as landlords adjust to new market reality

London’s tenants are seeing rent prices fall with three firms highlighting the trend – and how landlords are responding.

Estate agent Chestertons reports a significant increase of 125% in landlords lowering their asking rents, with some areas experiencing rent drops of up to 10% compared to February 2023.

This trend is down to a near 40% rise in available rental properties and fewer tenants actively seeking accommodation.

‘Volume of new tenants entering the market’

Chestertons’ head of lettings, Adam Jennings, said: “February didn’t see the volume of new tenants entering the market that many landlords had expected.

“At the same time, the number of available rental properties continued to rise which has left landlords little option but to start reviewing their prices.”

He added: “Landlords that have become accustomed to continually rising rents since Covid and aren’t willing to adjust to the current market conditions are increasingly finding themselves with empty properties, a situation which was very rare last year.”

The firm says that if rents continue falling, landlords will see an increase in renters locking into long-term tenancies.

Rental market stabilising with fewer renters

The fall in rent prices has also been picked up by SpareRoom and its data points to a rental market stabilising with fewer renters but more supply.

Matt Hutchinson, the firm’s director of communication, said: “Since the summer of 2022, London rents have rocketed as post-pandemic demand soared and supply failed to keep up.

“However, the number of people looking per room available is falling, which means that rents, although still ridiculously high, have started to follow suit.”

He adds: “Average London rents in February saw the biggest drop in a single month since the start of the pandemic.”

Mr Hutchinson says this could be a sign that London’s rental market is ‘rebalancing’.

A 2% year-on-year drop in prices

Foxtons has also confirmed the downward trend with a report of a 2% year-on-year drop in prices – though its data also shows a slight increase compared to January 2024.

While the number of applicants per available property has remained stable since October 2023, a significant year-on-year decrease highlights a shift in market dynamics.

Gareth Atkins, the managing director of lettings at Foxtons, emphasises the need for landlords to adapt.

He said: “The London lettings market is adjusting as we predicted, with applicant demand down 15% and listings up 20% compared to February last year.

“Landlords must adapt, as simply listing their property is no longer enough to achieve a good return.”

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