Average London rents have reached £2,294 a month, almost 50% higher than the UK average, increasing demand for alternative guarantor products among the capital’s international tenant population.
Research from Zero Deposit shows that average rents in London have risen by 9.9% since May 2024, when tenants were paying £2,088 a month.
Across the UK, average rents have increased by 10.5% over the same period, from £1,252 to £1,383. Despite slightly slower percentage growth in the capital, London rents remain 49.6% above the national average.
Separate internal data from Foxtons indicates that approximately 63% of its tenants come from overseas, many of whom may lack an established UK financial history or access to a traditional guarantor.
INTERNATIONAL TENANTS FACE REFERENCING BARRIERS
Zero Deposit says high rents and London’s internationally diverse tenant population are increasing demand for alternative forms of rental security.
This can include tenants who are financially capable of meeting their rent but cannot satisfy conventional referencing or UK-based guarantor requirements.
Foxtons has partnered with Zero Deposit to offer Guarantor+ to its tenants. Zero Deposit says the product is now available on more than 25% of properties marketed by participating letting agents and build-to-rent operators.
ALTERNATIVE PRODUCTS SEE STRONG TAKE-UP
Sam Reynolds, CEP of Zero Deposit, says: “London is unlike any other rental market in the UK. Rents are significantly higher than the national average, competition for homes is intense, and a large proportion of tenants are relocating from overseas.
“In that environment, it is increasingly common for renters to be financially capable of affording a property, but unable to provide a traditional UK-based guarantor. That can create unnecessary friction at the point of application, even when demand for housing is strong.
“We are seeing this reflected in adoption patterns, with over 77% of tenants in London selecting our product, Guarantor+, when given the option. It highlights just how pronounced these pressures are in the capital.
“As the rental market continues to evolve, particularly in cities with high levels of international mobility, guarantor products such as ours are playing an important role in helping tenants secure homes quickly while still giving landlords and agents the protection they need. What’s most important now is to ensure that a guarantor product is right for the tenant and landlord, giving them genuine, long-term security, regulatory protection and fair value.
“Our partnership with Foxtons reflects a major market shift, making Guarantor+ more widely available to tenants across one of the UK’s most dynamic lettings markets.”
LANDLORDS SEEK TO REDUCE VOIDS
Gareth Atkins (main picture, inset), Managing Director of lettings at Foxtons, says: “London remains one of the most competitive rental markets in the country, but the diversity of today’s tenant base means the ability to connect landlords with a broader pool of suitable tenants quickly and efficiently has become increasingly important.
“For landlords, lengthy void periods can have a significant impact on returns, particularly against a backdrop of rising costs and ongoing regulatory change. Every day a property sits empty represents lost income, which is why reducing friction in the lettings process has never been more important.
“At the same time, many prospective tenants who can comfortably afford their rent may not meet traditional referencing criteria. This is particularly common among international renters, students and the self-employed – groups that make up an important part of London’s rental market.”
“Flexibility and access will be increasingly important.”
And he adds: “The industry needs solutions that reflect the realities of today’s tenant base. By providing landlords with greater confidence and enabling more prospective renters to access homes, products such as Guarantor+ can help keep tenancies moving, reduce unnecessary delays and support stronger occupancy levels.
“As London’s tenant population continues to evolve, flexibility and access will be increasingly important. Landlords who can embrace solutions that broaden their reach to quality tenants while maintaining a smooth and secure lettings process will be best placed to minimise voids, maximise returns and benefit from the depth and diversity of demand across the capital.”
