Foxtons Lettings Market Index: Average Rental Prices Finish 20% Higher in 2022 Compared to Previous Year

New figures today from Foxtons, London’s leading lettings agent, show that rental prices climbed steadily throughout 2022, finishing the year 20% higher than in 2021.

High demand was a key factor throughout 2022, and overall, it remained 14% higher than in 2021.

Demand in December followed the regular downward trend around Christmas, falling 27% month on month.

There were 18 renters competing for every new property in December, a 23% increase on the previous month and 32% higher than the previous year.

West London was the most competitive area in December with 31 renters per new instruction, while South London followed with 28 renters per new instruction.

Using industry data, Foxtons found that new listings in December dropped below 20,000, falling 32% from month on month and reaching a four year low.

Across the entire year, 2022 had 32% fewer listings than 2021.

At £551, December’s average weekly rental price remained flat with November.

However, hovering just below the record-breaking prices in previous months, this average rent breaks records for end-of-year prices.

Central London remained the most expensive area in London, with average weekly rents 26% higher than the previous year.

Year to date – 2022

In December, renters spent an average of 99% of their budgets to secure their property, which is 1% lower than in November.

This is still 3% higher compared to 2021, and just below budgets of over 100% which Foxtons saw prior to the pandemic.

Year-on-year, budgets were 7% higher.

Renters looking for properties in Central London had to increase their budgets the most to remain competitive.

Budgets were 12% higher in Central London than in 2021, with East London following at a 10% annual increase.

Gareth Atkins, Managing Director – Lettings, said:

“Competition was higher than usual this December, with 18 renters per each new instruction – a 23% increase from November – so landlords saw more interest around their new listings than they’d typically expect to see this time of year.

Looking forward, London is starting 2023 with comparable levels of rental demand and supply to 2022, which might indicate a similarly strong market to 2022’s first quarter.

However, I suspect we’ll see the market rise more steadily than last year’s spikes, which is more akin to pre-pandemic seasonality.”

Sarah Tonkinson, Managing Director – Institutional PRS and Build to Rent, said:

“Last summer, we published a London Report posing the question on whether we’re seeing a “new normal” emerge, and as I look at how the supply/demand imbalance intensified through the year, I believe the answer is yes.

Demand remains high and I do not see a great glut of stock on the horizon – that doesn’t happen in London.

“As London’s overall demand grows ever higher, renters coming to the market must be savvy, prepared and persistent, talk to agents and give themselves more time to search.”