Another Rent Record High

London’s rental market has reached yet another milestone, with the average advertised rent for new listings climbing to £2,712 per calendar month (pcm). This marks the 15th consecutive record high, according to Rightmove’s latest Rental Trends Tracker (Q2 2025).

While the quarterly increase is a modest 0.5%, it underscores the ongoing pressure on tenants. Compared to five years ago, average rents in the capital are now £417 higher per month - a staggering 44% increase since the start of the pandemic in 2020. This far outpaces the 36% rise in average earnings over the same period.

Signs of a Market Shift

However, having said all that, rent growth across the UK - including London - is beginning to slow. Outside the capital, annual rent increases have eased to 3.9%, the lowest rate since 2020, even as average asking rents hit a new high of £1,365 pcm.

What’s Behind the Slowdown?

The cooling trend is largely due to a better balance between supply and demand. Compared to this time last year:

• Rental listings are up 15% (with the North East seeing a 33% surge).
• Tenant demand has dropped by 10%.
• Enquiries per listing have fallen to 11, down from 16 a year ago - though still above the pre-pandemic average of 7 (2019).

In London, demand remains strong, but the market is recalibrating. Properties now take an average of 25 days to let, up from 21 days last year. Additionally, 24% of London rentals have seen price reductions - the highest rate since 2017 - suggesting tenants now have more negotiating power.

What This Means for Tenants

While rents remain high, the slowing pace of growth and increased availability offer some relief. A more balanced market means:

• Less competition for each property.
• Greater potential for price negotiations or reductions.
• More time to make informed decisions, without the urgency seen during the pandemic.

For those planning a move in the coming months, the trend suggests that rents may stabilise further if supply continues to improve.

What This Means for Landlords

Slower rent growth might seem like a drawback, but there are encouraging signs for long-term investors:

• Buy-to-let lending is up 17% this year, with new rental purchases rising 28%, according to UK Finance.
• A more stable market reduces tenant turnover and pricing volatility.
• Demand still outpaces supply, particularly in key London boroughs.

With properties taking slightly longer to let, landlords should focus on competitive pricing and strong presentation to attract quality tenants. Those investing now are entering a less frenzied, more stable market - a solid foundation for sustainable rental income.

Looking Ahead

While supply hasn’t fully returned to pre-pandemic levels, the direction is clear: the UK rental market - especially in London - is recalibrating. Continued investor confidence and increased buy-to-let activity will be key to maintaining equilibrium and avoiding sharp fluctuations in rental rates and supply.

As Rightmove’s Colleen Babcock puts it: “The big picture is that yearly rent increases continue to slow, which is good news for tenants. Supply and demand is slowly rebalancing towards more normal levels… the latest industry snapshot suggests more investors are taking out buy-to-let loans, which should help to bring even more homes to the rental market.”

This article is for informational purposes. Always seek professional advice before making any property decisions.

Need help navigating London’s evolving rental market? Contact Fuller Gilbert today for a free rental valuation.