London rental demand was down by 14% in March compared to a year ago, but was up by 9% month-on-month, according to the latest lettings index from Foxtons.
There were 14 new tenants registering for every property instruction in March, up slightly from February but down from 17 a year ago.
On the supply side, new property instructions from landlords rose in January and February and cooled in March, but for the first quarter as a whole this resulted in a 15% year-on-year increase.
South London had the highest demand of any region in the capital, with nearly 17,000 applicants, which was 18% higher than Central London, the next most in-demand region.
Tenants’ declared budgets when looking for rental properties were 3% higher on average than a year ago.
Foxtons managing director of lettings Gareth Atkins says: “Inflation has dipped to its lowest point in two and a half years, with interest rates expected to follow.
“This should give buy-to-let landlords the green light going into Q2. “Furthermore, sales stock is now at its highest in eight years, increasing competition among sellers, which could give pause to landlords who were tempted to sell.
“Going into the Q2 market, we should see London’s companies begin recruiting drives and lettings activity pick up prior to the busy period in summer.
“However, average rent prices are expected to remain broadly flat in response to affordability pressures, which would enable more renters to secure their homes in the Capital.”
Richard Merrett, managing director of Foxtons’ mortgage broking arm Alexander Hall says: “With the base rate remaining stable and with considerably less volatility across Q1, we have seen some positive moves in the mortgage market.
“The two largest buy-to-let lenders have dropped rates, Coventry and Skipton have improved affordability assessments and one of the largest mutuals has launched a limited company buy-to-let proposition.”
