Struggling renters must move further out of London, says Foxtons boss

The boss of London's biggest estate agent has said the lack of rental options in capital is so "dramatic" people will need to move further out.

"We absolutely don't welcome this but people are going to have to move," Foxtons chief executive Guy Gittins told the BBC's Today programme.

People who are being priced out will "have to compromise on the property type or location," he said.

It came as Foxtons reported its annual profits had doubled in the past year.

Rents in London rose sharply last year, with Mr Gittins blaming a mismatch between supply and demand.

"The main issue is not affordability for the majority of the market - it's the stock issue," he explained.

Mr Gittins put the "unhealthy" supply and demand challenges down to the policy decisions made in the "mini budget" last September, which caused a drop in buy-to-let mortgage deals

He predicted the shortage in the market would continue for the next two to three years.

But Foxtons expects sales activity, which has slowed in the last six months, to improve in the latter part of this year.

"Mortgage rates have started to reduce in recent weeks and buyer activity is picking up, which may result in a more favourable sales market in the latter part of the year," the company said in a statement.

Average UK house prices felllling in the second half of 2022 as buyers were squeezed by higher mortgage rates and living costs,.

However, fresh figures from the Halifax suggest the situation has improved somewhat. Average UK property values increased by 1.1% on a monthly basis in February, it said, accelerating from 0.2% growth in January.

Kim Kinnaird, director at Halifax Mortgages, said: "Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December.

"Still, with the cost of a home down on a quarterly basis (by 2.5%), the underlying activity continues to indicate a general downward trend.

Earlier this month, property portal Rightmove found that house hunters are looking in a wider geographical area compared to before the pandemic, with increased searches for more properties in cheaper areas further afield.