London’s rental market ended the year with signs of easing pressure, as a recovery in property supply helped temper competition and gave renters more room to manoeuvre.
New figures from Foxtons show that market competitiveness improved in December. Measured by the number of new renters per new instruction, competition rose by almost 20% compared with November, reflecting a better balance between supply and demand.
By year-end, average applicant budgets reached £553 per week, up 2% on 2024 levels. Budgets dipped slightly in December, sitting 2% below November, but the wider picture across 2025 points to stability rather than a sharp correction. Studio flat budgets recorded the largest fall, down 17%, while one-, two- and three-bedroom flats all posted modest increases.
Renter spending patterns also held steady. December saw only a 1% drop in the proportion of budget renters used to secure a home compared with November. Around 63% of renters agreed lets below their allocated budget, while 30% spent more than planned. The split suggests that although competition remains, a majority of renters are still finding options within their means, alongside a sizeable group prepared to pay extra for specific properties.
Demand softened towards the end of the year, with rental demand falling 22% in December compared with November. This aligned with typical seasonal patterns, as fewer moves take place over the festive period. At the same time, new listings increased month on month, rising from about 23,000 to 25,000 homes.
The second half of the year saw a clearer shift in supply. Overall, stock rose 6%, easing competition across all areas of the capital and bringing more choice to the market. This rebound followed a quieter November, when some landlords paused activity while awaiting clarity from the Autumn Budget. On an annual basis, new instructions in 2025 were 8% higher than in 2024.
Key market indicators from the data include:
Average applicant budgets of £553 per week, up 2% year on year.
Rental demand down 22% in December compared with November.
New listings increasing to around 25,000 homes, up from roughly 23,000 the previous month.
Gareth Atkins, managing director of lettings, said, “Whilst the conversation was dominated by Renters’ Rights last year, we called it correctly: modest rent growth, with new listings steadily increasing despite the noise,” he said. “That’s the real story – supply driving competition between landlords, not legislation stalling the market.
“2026 follows the same script. Moderate growth with intensifying competition,” he added. “The winners will be those landlords pricing their listings with surgical precision, using real-time data, not guesswork. The Renters’ Rights Act phases in from 1 May, and yes, it’ll change the lettings market. However, confidence tends to rebound once speculation ends and the rules become actionable. Your Foxtons agent knows exactly how to navigate this new landscape. So, let’s crack on.”
