Improved supply and easing demand point to a more balanced rental landscape
London’s lettings sector is beginning to stabilise despite ongoing economic challenges, new figures from Foxtons suggest.
The data indicates a consistent rise in property supply, helping to offset earlier fears of landlords exiting the market. Demand pressures in areas that previously experienced sharp rent growth are also starting to ease.
Average weekly rents in the capital climbed 3% year on year to £589 in April, reflecting solid tenant demand and an improved volume of available properties. Landlords appear to be adjusting rental pricing cautiously to recoup margins lost in recent years.
Outside of London, the average rent for newly advertised homes hit £1,349 per calendar month, according to Rightmove’s latest Rental Trends Tracker. Although this marks a new high, the 0.6% quarterly increase is the lowest recorded for this period since 2020, pointing to a slowdown in rental inflation across the UK.
In London, the number of applicant registrations dropped 3% in April from the previous month — a deviation from typical seasonal trends. On a year-to-date basis, applicant numbers are 5% below levels seen in 2024, indicating a more tempered yet active rental market. Central London remains a stronger performer in terms of demand, while South and West London have experienced sharper drops.
The average number of applicants per instruction slipped to 12.4 in April, a 1.7% monthly decrease. Compared with last year, this figure is down 14.3%, suggesting a reduction in market pressure. Areas such as East and South London — previously marked by high competition — are now seeing more balanced conditions.
Supply improved with a 5% rise in new listings month on month in April, pushing the year-to-date increase to 9% versus 2024. While April 2024 saw lower activity, current levels suggest the market is reverting to more typical patterns.
Applicant budgets increased 2% annually in April, a sign of continued tenant confidence and willingness to pay for quality rentals. While Central London budgets remained flat, other regions saw growth. Demand for studio flats declined, with budgets down 15%, while larger properties saw increased spending—reflecting a shift in renter preferences.
The average spend as a proportion of budget fell to 96% in April, down from earlier months. Sixty-four percent of tenants are now securing properties below their registered budget, and the year-to-date spend ratio has dropped 1%, indicating improved negotiation conditions for renters.
“April’s rental market activity reflects a more balanced landscape for renters and landlords alike,” remarked Gareth Atkins (pictured), managing director of lettings at Foxtons. “A 5% rise in new property listings has helped ease some of the pressure seen in recent years, giving renters greater choice and more room to negotiate.
“The slight slowdown in applicant registrations — down 3% month on month — also indicates a shift in pace, which is typical of a market moving toward greater stability. This trend, alongside a dip in the average percentage of budget spent, shows the market is becoming less competitive and more accessible for many.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
