London Rents Hit New High

London’s rental market has reached a new milestone, with the average advertised rent climbing to a record £2,698 per calendar month in the first quarter of 2025, according to the latest Rightmove Rental Trends Tracker. This marks the 14th consecutive quarterly record and represents a 2.5% increase compared to the same period last year.

Despite this continued upward pressure on rents, market conditions appear to be gradually shifting. The number of available rental properties across London and the wider UK has increased, while tenant demand is softening. In March, the supply of new rental listings rose by 11% compared to a year earlier, contributing to an 18% annual increase in the total number of homes available to rent.

Nationally, the average advertised rent outside of London also reached a new record of £1,349 per month - up 4.5% year-on-year - but this is the smallest annual rise recorded since 2020. The quarterly increase stood at just 0.6%, perhaps indicating a cooling pace of rental growth.

Enquiries per rental property have also reduced. London now sees an average of eight prospective tenants per listing, whilst the national average stands at 12. This reflects a 25% drop from last year’s average of 16 enquiries per property across the UK, although it is still over double the average of five in the first quarter of 2019.

The easing demand may be partly attributed to a rise in first-time buyer activity. The number of agreed sales in the first-time buyer segment rose 7% in Q1, supported by improved mortgage rates and a push to complete transactions before April’s stamp duty changes.

In response to the shifting dynamics, a quarter of landlords across the country are now reducing advertised rental prices - the highest proportion since 2018. Rightmove analysts suggest this may point to affordability limits being tested after years of faster rent increases compared to wage growth. Since 2020, average rents have surged by 40%, while average earnings have grown by 31%.

Although the upcoming Renters’ Rights Bill is not yet influencing rental activity in a significant way, experts suggest it could introduce challenges for both tenants and landlords, especially regarding upfront payments and tenancy security.

“Supply and demand in the rental market is really varied at the moment across Great Britain,” said Christian Balshen, lettings expert at Rightmove. “The number one thing landlords will still want is a good, reliable, long-term tenant, and there’s likely to be even more emphasis on this once the Bill comes into effect.”

 

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