Increase in stock and reduced demand indicates a more balanced London lettings market

• December saw a return to a more balanced lettings market as a month-on-month decrease in new renters combined with a welcome increase in stock levels
• Aligned with usual seasonal patterns, new renters in December decreased by 24% month-on-month decrease overall, demand in 2023 was 12% lower than in 2022
• Overall stock levels in 2023 were 13% higher than in 2022 and this trend of sustained supply is anticipated to continue into the first half of 2024

In December, there was a 24% month-on-month decrease in applicant demand, aligning with the usual seasonal decline in the lettings market. Overall, demand in 2023 was 12% lower than in 2022, with a noticeable drop starting in July, reflecting more normalised market activity.

The year-on-year decrease of 22% in new renters per new instruction indicates a shift towards a more balanced lettings market, characterised by increased stock and stable demand levels. While the number of renters per new instruction has decreased across London, figures remain high in South London with 24 renters per instruction, as well as West and East London's 23 and 22 renters respectively.

The rise in stock levels, especially in the latter half of 2023, provided a welcome boost to the market. Notably, September and October saw stock levels 29% and 37% higher than the previous year, with even December registering a 22% increase over December 2022. Consequently, the overall stock in 2023 was 13% higher than in 2022, and this trend of sustained supply is anticipated to continue into the first half of 2024.

Foxtons year to date key market indicators

Gareth Atkins, Managing Director of Lettings at Foxtons, said:

“Our belief is that the 2024 London Lettings market will be a far more traditional market

than we have seen since 2020. Our expectations are for volumes to rise with seasonality

over spring and summer before plateauing in Q4 offering more predictability for renters

and landlords despite the General Election on the horizon.”

Sarah Tonkinson, Managing Director of Institutional PRS and Build to Rent at Foxtons, said: 

“Now in the first month of 2024, the market is certainly better balanced than we have seen

in recent years. It makes a strong start to what should be a pivotal year in London lettings.”

About Foxtons

Founded in 1981, Foxtons is London's leading estate agency and largest lettings agent, with a portfolio of over 27,000 tenancies. The Group operates from a network of over 60 interconnected branches, offering a range of residential property services across three business segments: Lettings, Sales and Financial Services.

The Group's strategy to accelerate growth is focused on non-cyclical and recurring revenues from Lettings and Financial Services refinance activities, supplemented by market share growth in Sales. In order to drive organic growth, the Group is rebuilding its competitive advantages, with a strong focus on leveraging data and technology; investing in people and culture; and reinvigorating the Foxtons brand.

By rebuilding Foxtons' estate agency DNA and returning the business to its position as London's go-to estate agent, the Group aims deliver significant profit growth and deliver value for shareholders.

• Lettings organic growth: Focus on winning new property instructions, speed to market and high quality landlord service to drive revenue growth.
• Lettings acquisitive growth: Acquire, integrate and service high quality lettings portfolios.
• Sales market share growth: Reinvigorating the Foxtons brand and increasing sales headcount to grow addressable market share.
• Financial Services revenue growth: Increasing adviser headcount, improving productivity and cross sell to drive revenue growth.

To find out more, please visit www.foxtonsgroup.co.uk