0:03 AM, 17th April 2024, About 7 months ago
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London’s rental market is showing signs of a busy spring with a 10% rise in tenants signing agreements in March compared to February, according to estate agent Chestertons.
This surge comes after February saw a rise in rent reductions by landlords, which seems to have attracted new tenants and encouraged existing ones to renew their leases – which were up by 4%.
However, Chestertons warns that renters may soon face stiffer competition as the number of available properties has dipped – they were down by 1.5% in March.
This, coupled with rising demand, could lead to rent increases again.
This trend aligns with Zoopla’s recent report, which highlights a significant slowdown in London’s annual rent inflation, currently at 5.1% compared to 15.3% a year ago.
The firm’s head of lettings, Adam Jennings, said: “Not only did February’s rent reductions fuel new tenant demand throughout March, but it also boosted the number of tenants renewing their existing tenancy agreement as they were in a stronger position to negotiate any planned rent increases and settle at a more favourable level.
“However, as we head further into spring, demand for rental properties will only grow which will see rents going up again if supply doesn’t follow suit.”
He added: “In March, we already saw a 1.5% decrease in the number of available rental properties compared to the previous month.
“Due to this and the uplift in tenants wanting to move, we are beginning to see fewer landlords who are willing to accept a rent reduction compared to February.
“Having said that, any rent increases are likely to be subtle.”
Meanwhile, London’s property sellers are holding firm on their asking prices in anticipation of the traditionally busy spring market.
Chestertons data reveals an 11% drop in sellers willing to negotiate compared to February.
This seller confidence is backed by Nationwide’s house price index, showing London as the only UK location with property price growth in the last three months (up 1.6%).
Matt Thompson, Chestertons’ head of sales, said: “Historically, spring is the time of year when more house hunters start their search, creating more favourable conditions for sellers.
“To generate as much interest in their property as possible, the majority of owners have been waiting for the Easter holidays to end before putting their home up for sale.
“We therefore expect the spring market to reach its full potential over the coming weeks.”
Because of the delay, Chestertons registered only a 2% uplift in the number of available properties in March vs February.
Mr Thompson also warns that demand will likely outstrip supply, creating a competitive environment for buyers with limited room for price negotiation.
