London’s rental supply rebounds as tenant competition cools

Tenant competition in London’s lettings market eased at the end of last year as a pickup in available homes to rent began to rebalance conditions for renters and landlords alike.

New figures from Foxtons show that market competitiveness in December rose by almost 20% compared with November.

That’s based on the number of new renters chasing each new instruction.

By the year end, average applicant budgets stood at £553 per week, marking a 2% rise on 2024 levels.

Modest growth this year

The firm’s managing director of lettings, Gareth Atkins, 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.

“That’s the real story – supply driving competition between landlords, not legislation stalling the market.”

He added: “2026 follows the same script. Moderate growth with intensifying competition.

“The winners will be those landlords pricing their listings with surgical precision, using real-time data, not guesswork.”

Renter budgets

Foxtons also reveals that tenant spending limits dipped slightly through December, settling 2% below November, as seasonal caution set in.

Over the course of 2025, studio flat budgets recorded the sharpest adjustment, falling 17%, while one-, two- and three-bedroom flats posted modest uplifts.

Renter behaviour remained broadly stable with the proportion of budgets used to secure a home slipping by just 1% month on month.

Around 63% of renters agreed lets below their stated ceiling, while 30% paid above it, pointing to a flexible market.

Demand fell at Christmas

Renter demand softened as expected during the festive period, dropping 22% from November as fewer moves took place.

At the same time, fresh listings climbed from roughly 23,000 to 25,000, giving would-be tenants more choice.

Supply gathered momentum across the capital, particularly in the second half of the year.

A 6% uplift in available homes helped take pressure off competition and widened options across every London region.

Activity had slowed in November, when some landlords appeared to hold back decisions ahead of the Autumn Budget, yet the rebound was swift.

New instructions across 2025 finished 8% higher than the previous year.