Tenant budgets continue to rise across the capital
The London rental market remained stable in February 2025, with continued high demand and a steady supply helping to support overall market balance, the latest Foxtons Lettings Market Index revealed.
Average weekly rent across the capital rose slightly compared to the same period last year, reaching £557. Monthly rental values held firm from January, while house rents increased 5% year-on-year. In contrast, studio rents saw a 5% decline over the same period.
Tenant demand dropped 18% month-on-month in line with typical seasonal patterns, but stayed close to February 2024 levels, down just 3% year-on-year. Central London stood out with a 12% annual rise in applicant numbers, pointing to sustained interest in the area.
Competition among renters remained strong, averaging 13 applicants per new instruction — the same as January. North London saw higher levels of interest, with a 16% annual increase in applicants per property, pushing the regional average to 17.
Applicant budgets also continued to rise in early 2025, reflecting confidence in the market. The average renter budget grew 3% year-on-year to £534 per week. South London recorded the sharpest increase, up 4% to £511.
New rental listings stayed close to 2024 volumes, with only a minor 2% year-on-year drop. February’s figures showed an 11% decline from January, consistent with seasonal shifts. Westminster remained one of the most active boroughs, accounting for more than 10% of new listings.
So far this year, over a third of tenants have rented properties at or above their budgets, underscoring the level of competition. In February, renters spent an average of 98% of their budget, up slightly from January. North London saw the largest rise, with a 5% increase in average spending, in line with its growing applicant numbers.
“The rental market in 2025 is showing a more measured pace compared to the intense competition of previous years,” said Gareth Atkins (pictured), managing director of lettings at Foxtons. “Tenants are no longer making snap decisions to beat out the competition and are instead taking more time to explore their options and compare neighbourhoods before committing.
“At the same time, landlords are adjusting to evolving renter expectations by maintaining well-presented properties and setting competitive pricing. With the upcoming Renters’ Rights legislation, the market is expected to further emphasise quality and value.”
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