London Rental Market Stabilises Amid Rising Supply
Recent figures show the London rental market is shifting from high competition to a more balanced, accessible state. Data released by Foxtons, one of the capital’s leading estate agencies, highlights a steady increase in rental property availability and a softening in demand, offering a more favourable environment for prospective tenants.
Rental Supply on the Rise: London Rental Market
The month of April 2025 saw a 5% uplift in the number of new rental properties coming onto the market, contributing to a 9% increase in supply compared to the same point in 2024. This marks a notable shift from previous years, where limited stock created heightened pressure and rising prices. The return of more consistent listing volumes suggests improved landlord confidence and a potential easing of regulatory or economic concerns that had previously led some to exit the sector.
Foxtons noted that this growth in listings has helped recalibrate the market, particularly in areas that have long been rental hotspots. East and South London, which have historically experienced fierce competition, are now seeing less intensity, offering renters greater choice and negotiation leverage.
Applicant Demand Eases Slightly
In contrast to the increase in available homes, the number of registered renters has dipped modestly. April saw a 3% decline in new applicant registrations compared to the previous month – an unexpected shift given the typical seasonal uptick. Year-to-date, renter registrations are down 5% compared with 2024, with Central London bucking the trend by recording a 7% rise in applicant demand.
Other regions, however, saw more noticeable drops. South London registrations were down by 19%, while West London saw a significant 24% fall. These figures point to a tapering of demand in traditionally popular zones, likely influenced by changing tenant priorities and perhaps more varied housing options becoming available across the city.
Fewer Applicants per Listing Signals Cooling Competition
Another key metric tracked by Foxtons is the number of applicants per available property. In April, this figure fell to an average of 12.4 per listing, a 1.7% decrease from March. Compared to the same period last year, this represents a 14.3% drop, indicating that the intense scramble for homes is starting to wane. Areas like East and South London have led this shift, showing the clearest signs of rebalancing.
Rental Prices Continue Gradual Climb: London Rental Market
Despite the slowdown in applicant numbers, average rental prices have continued their upward trajectory. April’s average weekly rent stood at £589, reflecting a 3% year-on-year increase. This trend suggests that while demand may be easing, it remains solid enough to support modest price growth, particularly as landlords adjust for past financial pressures.
Not all regions saw equal growth, however. South and West London led the gains with 4% increases, while Central London rents remained relatively steady, perhaps reflecting a plateau following previous spikes.
Budget Trends Reflect Changing Tenant Behaviour
Tenants are also demonstrating subtle shifts in budgeting and preferences. On average, renters’ declared budgets rose by 2% year on year, with most areas recording slight increases. Interestingly, budgets for studio flats dropped significantly – by 15% – hinting at a trend away from smaller units in favour of more spacious properties. One-, two-, and three-bedroom homes all saw upticks in allocated budgets, reflecting perhaps a continued post-pandemic desire for comfort, flexibility, or space for remote working.
However, when it comes to actual spending, renters appear to be exercising greater financial caution. In April, tenants spent on average 96% of their stated budgets—a small but meaningful drop from previous months. Sixty-four percent of renters managed to secure properties below their maximum budget, indicating improved negotiating conditions and reduced urgency.
This shift was reinforced by a 1% decline in the average budget percentage spent so far in 2025, pointing to a broader move toward measured, less pressured decision-making in the rental process.
Expert Commentary: London Rental Market
According to Gareth Atkins, Managing Director of Lettings at Foxtons, these shifts represent a return to more typical market dynamics. “April’s data points to a healthier balance between supply and demand,” he said. “A 5% increase in new listings has reduced some of the pressure renters have faced in recent years. The decline in applicant registrations, although modest, aligns with what one would expect in a stabilising market. With renters spending less of their budget, it’s evident that the frantic pace is slowing, allowing for better decisions and improved accessibility.”
Regional Variations Reveal Mixed Fortunes
Foxtons’ broader year-to-date data paints a varied picture across London’s boroughs:
| Region | Supply (New Instructions YoY) | Demand (New Registrations YoY) |
| All London | +1% | -5% |
| Central | -1% | +7% |
| East | +7% | -1% |
| North | -10% | -1% |
| South | -4% | -19% |
| West | +1% | -24% |
These disparities underline the fact that London’s rental market is not homogenous. While Central London enjoys rising demand, other areas are adjusting to softer market conditions.
Outlook: A Healthier Market for Tenants and Landlords Alike
The recent trends suggest a turning point for London’s rental landscape. With supply strengthening and demand settling into a more manageable rhythm, both landlords and renters stand to benefit. Landlords may see improved tenant retention and lower vacancy rates as competition eases, while tenants gain more flexibility and breathing space during their property search.
As the year progresses, continued monitoring will be essential to see whether this new equilibrium holds, especially amid wider economic fluctuations. For now, London’s rental market appears to be finding its footing – more measured, more balanced, and perhaps a little more forgiving than before.
