London rental market: Why rents might finally stop climbing so fast in 2023
London’s rental market is showing signs of “stabilising” with prices beginning to slow despite demand remaining high – meaning rents may finally start to slow their aggressive recent climb in the capital.
Estate agency Chestertons has warned that 2023 will still be disrupted by pandemic shifts in supply, but renters may have an easier time of it.
It said the number of landlords who reduced rent in November 2022 was double that of 2021, and 50 per cent more than October last year in London.
Chestertons also said there were 10 per cent more rental properties on the London market now, which the number available to rent also 50 per cent up on November 2021.
The increased supply and falling prices has led to a 10 per cent spike in enquiries from new tenants from two years ago, with London viewing appointments also up 12 per cent.
With Brits now returning to the office and pandemic restrictions over, many more Brits are renewing existing leases, up 30 per cent in November last year, on top of a 18 per cent jump the previous month.
Chestertons added that it expects ‘long covid tenancies’ to end soon, with rental prices cooling and many properties released back into the market.
It said in 2023, “more properties are now becoming available and that affordability pressures are placing an effective cap on tenants’ budgets.
“This is helping to rebalance London’s rental market and reduce the pace of rental price growth. It forecasts rents to continue to grow by up to 5 per cent over 2023, before plateauing in 2024.”
Richard Davies, COO of Chestertons, added that “Covid had a major impact on the natural cycle and operation of London’s rental market with lockdowns restricting tenants’ movements and their ability to move, artificially cutting supply and extending the average rental property’s time on the market which impacted on pricing.”
“The aftershocks of this unusual period are finally coming to an end and we believe that London’s rental market is now showing signs of stabilising, with more rental properties coming onto the market and an increasing number of landlords being realistic on the rent they are prepared to accept to minimise any void period”