London’s rental market boomed in May with rising demand

London’s rental sector experienced a robust resurgence in May, driven by a sharp increase in tenant interest and a steady rise in available properties, research reveals.

According to Foxtons’ latest market index, the capital saw a dynamic market, with heightened activity signalling a strong seasonal boost as summer approaches.

Tenant registrations soared by 35% from April to May, rebounding from a surprising decline in the previous month.

Despite this monthly spike, overall applicant numbers for the year remain 5% below 2024 levels, indicating a cautious approach among renters.

Opportunity for landlords

The firm’s managing director of lettings, Gareth Atkins, said: “London’s rental market came back with real force in May.

“We saw a 35% surge in applicant demand alongside sustained growth in supply, a clear sign of a market gaining strength and momentum.

“Central London continues to outperform, and renters are re-engaging with pace and purpose.”

He added: “As we move into summer, the lettings landscape is vibrant, competitive and full of opportunity for both landlords and tenants.”

Central London is best for gains

Foxtons says that central London led the charge with year-on-year growth, while South and West London lagged, posting declines of 18% and 23%, respectively.

The market grew more competitive, with 14.15 new renters vying for each new listing, a 14% jump from April.

However, this figure remains 23.7% lower than last year, suggesting less frenetic demand overall.

Central London, north London and Surrey saw the sharpest rises in competition, with increases of 24.7%, 21.6%, and 34.7%, respectively.

Pool of properties grew

The number of available rental properties also grew, with listings climbing 9% month-on-month, similar to gains made in March and April.

This brought year-to-date growth to 9% compared to 2024, with roughly 40,000 new listings recorded across the capital in May.

This uptick has enhanced market fluidity, offering tenants greater choice.

Rent prices remained stable at £589 per week, matching April’s figure, though year-to-date values have risen 3% compared to 2024.

Landlords gain pricing power

West London, south London and Surrey led with increases of 5%, 4% and 5%, respectively, as landlords cautiously regain pricing power.

However, affordability constraints in budget-sensitive areas may limit further rises.

Tenant budgets edged up 1% to just over £550 per week, fuelled by renewed interest in central locations and larger homes.

Notably, 64% of renters secured properties below their stated budgets, a 1% improvement from April, reflecting a more balanced market bolstered by improved supply.