London rental market rebalances amid rising supply
Foxtons data shows
- There was a 5% increase in market supply in April, and a 9%, increase in market supply of new instructions year to date
- The average rent in April 2025 increased by 3% to stand at £589 per week
- April saw a 3% month-on-month reduction in applicant registrations, which goes against the trend usually seen at this time of year
- In April, renters spent an average of 96% of their budgets – a decline from prior months, suggesting a less competitive market.
New data from Foxtons shows that despite broader economic uncertainties, the London lettings market continues to display signs of resilience and rebalancing. Property supply has expanded steadily, countering concerns over landlord attrition, while pressure in historically overheated regions is beginning to ease. Average rental prices have edged upwards, suggesting landlords are cautiously rebuilding yields in response to previous margin compression.
Applicant registrations decreased by 3% in April on a month-on-month basis – atypical for this stage in the seasonal cycle – with year-to-date figures showing applicant volumes were 5% below the same period in 2024, reinforcing a narrative of more moderate but still active demand. Central London remains a relative outperformer, with applicant demand tracking ahead of last year, while South and West London have seen more noticeable declines.
The number of new applicants per instruction dipped to 12.4 in April, a 1.7% decline from March. Year-to-date, this metric was down 14.3% compared to 2024, confirming an easing market intensity. The most significant dip was in historically competitive areas such as East and South London, suggesting a return towards more balanced conditions.
Market supply strengthened with a 5% month-on-month increase in new listings during April, contributing to a 9% year-to-date uplift versus 2024. Given the unusually quiet April last year, the current volumes reflect a more normalised and healthier market environment.
Average rent rose by 3% year on year to £589 per week in April, supported by solid underlying demand and healthier stock levels. South and West London led regional gains, each posting 4% annual growth.
Average applicant budgets rose by 2% year on year in April, underlining continued confidence among renters and willingness to pay for quality housing. While most regions registered increases, Central London remained flat. Notably, studio flat budgets declined by 15%, likely driven by shifting preferences toward larger living spaces, whereas budgets for one-, two- and three-bedroom properties all recorded growth.
In April, renters spent an average of 96% of their budgets – a decline from prior months, suggesting greater negotiating power and less urgency. 64% of applicants are now securing homes below their registered budget. Year-to-date, average spend as a percentage of budget has edged down 1%, further underscoring a more stable and less pressurised market landscape.
Gareth Atkins, Managing Director of Lettings, said: “April’s rental market activity reflects a more balanced landscape for renters and landlords alike. 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.”
Foxtons year to date key market indicators
| Supply
New Instructions (year-on-year) |
Demand
New Renter Registrations (year-on-year) |
|
| All London | 1% | -5% |
| Central | -1% | 7% |
| East | 7% | -1% |
| North | -10% | -1% |
| South | -4% | -19% |
| West | 1% | -24% |
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