London lettings market bolstered by record supply and resilient renter demand
· Supply conditions improved materially in July, with almost 50,000 new rental listings recorded, up 4% from June and 12% higher than July 2024. This represents the highest monthly volume in the last four years.
· Renter demand strengthened notably in July, with a 25% uplift in new applicant registrations month-on-month. Compared with July 2024, demand remains marginally higher, underlining the resilience of the London lettings market and the consistency of the seasonal uplift.
· Average rents rose 1% month-on-month in July to £596 per week, just shy of the market peak recorded in 2023. Since April, rental values have largely stabilised, with the market absorbing new supply while still supporting modest growth.
July represents a pivotal point in the lettings calendar, offering critical insight into seasonal dynamics and underlying market sentiment. The data indicates a healthy, stabilising London rental market with robust renter activity, a surge in new instructions, and steady rental growth. A continued rebalancing of supply and demand is evident, which is supporting stable landlord returns and tenant choice.
A 25% uplift in new applicant registrations month-on-month and a small uplift on July 2024, underlines the resilience of the London lettings market. With year-to-date registrations now only 3% lower than the same period in 2024, the consistency of the seasonal uplift is once again generating applicant demand. Regionally, Central London continues to lead in absolute volume and growth, recording a 4% increase year-on-year. In contrast, the South and West regions saw declines of 15% and 22% respectively.
The number of new renters per new instruction rose 21% month-on-month, reaching 18.5 renters per available property in July. This serves as an indicator of market competitiveness, which aligns with expectations for the summer peak. When viewed year-to-date, competitiveness has eased slightly with a 2.9% year-on-year reduction, but this is a significantly smaller deficit than recent months. Central and North London were the only regions to see an increase in competitiveness compared to last year, while the East and Surrey regions experienced the most pronounced declines.
Renter budgets continue their gradual upward trajectory, with the average applicant budget reaching £554 per week year-to-date, 2% higher than the same period in 2024, with July delivering a further 1% monthly increase. While this marks the highest level in four years, the pace of growth remains measured, constrained by affordability limits and broader economic headwinds. Notably, budget increases have been most pronounced in West London, up 4% year-on-year.
Supply conditions improved materially in July, with almost 50,000 new rental listings recorded, up 4% from June and 12% higher than July 2024. This represents the largest volume in the last four years and reflects growing landlord confidence and re-engagement with the market. Year-to-date, new listings are tracking 13% ahead of the same period in 2024, validating the market returning to a more typical seasonal pattern and alleviating the upward pressure on rents.
In July, tenants spent an average of 99% of their stated rental budget, in line with year-to-date averages. Central London remains the only region where renters consistently spend above their registered budget. Across the network, 29% of renters are exceeding their budget to secure property, while 63% transact below budget, indicating improved choice and reduced urgency due to stronger supply.
Gareth Atkins, Managing Director of Lettings, said:
“The London lettings market remained red hot in July. Despite a modest uptick in supply, applicant demand surged by 25% month-on-month, resulting in over 18 applicants per available property. This sustained pressure has driven rental prices upward in line with seasonal trends, and we expect this momentum to continue for the rest of the summer.”
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