London’s rental supply stays strong as demand drops in Christmas run-up

New PRS listings continued to climb in October as the capital’s rental market showed no sign of weakening, even as demand began to ease ahead of Christmas.

Foxtons’ data reveals that supply stayed strong throughout the month, extending a trend seen since the start of the year.

Listings slipped 7% compared with September, yet still outperformed October 2024.

Over the year, new instructions are running 10% higher than last year, giving tenants more choice than they saw in previous autumn cycles.

Demand, however, cooled sharply with renter registrations dropping 33% between September and October as the traditional seasonal slowdown took hold.

London’s PRS is resilient

The firm’s managing director of lettings, Gareth Atkins, said: “October saw a seasonal slowdown in demand, but the London lettings market remains resilient.

“The recent Royal Assent of the Renters’ Rights Act is a significant milestone, and with Phase 1 implementation confirmed for 1 May 2025, landlords should prepare for upcoming changes by working with a London lettings expert to get the right price for their rental property.”

He added: “Despite easing competition, rental values have held firm, supported by strong applicant budgets and improved supply.

“These trends underline the continued strength of London’s rental sector and its ability to deliver returns for landlords, even in a shifting regulatory landscape.”

Rental demand is firm

Foxtons says activity has been tracking 7% below 2024 levels across the year, although the need for rental homes in London remains firm.

Declines were most noticeable in the South and West of the capital, where enquiries tapered off faster than in other areas.

Average weekly rents dipped 3% to £575, echoing the softening usually seen in October.

Even so, year-to-date figures show rents are still 2% higher than in 2024.

Every borough of London recorded growth over the year apart from the North, pointing to steady pricing supported by continued demand.

Lower tenant competition

Tenant competition has also eased with the number of new renters per instruction falling nearly 29% month-on-month.

In August, roughly 20 tenants chased each available home; by October that had halved to nine.

Foxtons says this gives renters a better chance of securing a property without the bidding pressure that dominated earlier in the year.

Budgets also remained tight but consistent as tenants spent an average of 99% of their registered limits.

Around 63% of renters found homes below budget, while 30% had to push beyond what they originally set aside.