"Rents are holding firm, and applicant budgets are nudging upward as renters prepare for spring moves. The early season is rarely dramatic, but that is its strength."
- Gareth Atkins - Foxtons
The London lettings market is showing early signs of recovery, with rental supply increasing and activity picking up after the winter slowdown.
February data from Foxtons points to shifting supply and demand dynamics reshaping competition and pricing across the capital.
Renter demand remains below last year’s levels; however, market activity has strengthened compared with the quieter winter period. At the same time, a rise in available homes is giving tenants more choice across a wider spread of London locations. Affordability pressures appear stable, with both rents and renter budgets holding broadly steady.
What the data shows for the London lettings market
Applicant registrations continue to trail last year’s figures, although the gap is narrowing as seasonal momentum builds. Registrations were:
- 12% lower year on year
- 11% lower month on month
Despite this, activity sits well above the winter low point, indicating that demand is gradually returning as the spring lettings season approaches.
Renter budgets have remained consistent, averaging £540 per week year to date to the end of February, marking a 1% annual increase. On a monthly basis, budgets were largely unchanged, suggesting renters’ spending power has not weakened further despite ongoing cost pressures.
Rental supply improves as competition eases
Supply-side conditions in the London lettings market have strengthened, supporting a more balanced environment. New listings increased by 4% year on year, signalling a steady recovery in available stock.
This rise in rental supply has reduced pressure on tenants. The number of new renters per instruction declined by 7.6% year on year, reflecting less intense competition for each property. Month on month, this figure fell by 5.6% in February compared with January.
For landlords, this shift suggests a move away from the highly competitive conditions seen previously, with pricing and presentation playing a more decisive role in securing tenants.
What this means for landlords
Improving rental supply and stabilising demand are beginning to reshape letting conditions across London. For UK landlords and investors, several trends stand out:
- Greater stock levels are giving tenants more negotiating power
- Stable renter budgets indicate affordability has not deteriorated
- Reduced competition may lengthen void periods for poorly priced properties
- Well-presented homes remain well-positioned to let quickly
The balance between supply and demand is becoming more even, creating a market that rewards realistic pricing strategies rather than aggressive rent increases.
Industry view on market momentum
“London's rental market is shifting gears; out of winter's lull and into something steadier,” said Gareth Atkins, managing director of lettings. “Supply is building, with February’s new listings up four per cent on last year. Rents are holding firm, and applicant budgets are nudging upward as renters prepare for spring moves. The early season is rarely dramatic, but that is its strength."
"In a market that's building rather than booming, a well-priced, well-presented listing often lets quickly, cleanly and on landlords’ terms. We are now two months away from the implementation of the Renters Rights Act, and our focus is firmly on finalising the necessary paperwork and training our teams to offer the best support.”
What happens next for the London lettings market
As the spring season progresses, further increases in rental supply could continue to ease competition, particularly in central London markets. However, sustained demand recovery will be key to maintaining rental values and supporting landlord returns.
Attention is also turning to upcoming regulation, including the Renters Rights Act, which is expected to influence landlord strategy, compliance requirements, and tenant relationships across the UK property market.
The coming months are likely to test whether current momentum translates into a sustained recovery, or whether affordability constraints limit further growth in renter demand.
