The London rental market has witnessed a sharp surge in demand at the start of 2025, according to estate agency Chestertons.
Data from the firm reveals a 22% increase in tenant enquiries and a 34% rise in tenants making offers in January 2025 compared to the same period in 2024.
The growing demand suggests that London’s lettings market is set for a highly competitive year ahead.
Several factors have contributed to this rise in activity. Rental prices saw a slight dip in the latter half of 2024, attracting cost-conscious tenants eager to secure a more affordable lease before prices climb again.
ECONOMIC RECOVERY
Additionally, the market is seeing an influx of renters due to continued economic recovery, job relocations and an increase in corporate lets as businesses expand their workforce in the capital.
Despite this surge in demand, supply levels remain stagnant at 2024 levels, increasing competition for available properties.
With more tenants competing for the same housing stock, rental prices could soon begin to climb again, reversing last year’s slight downturn.
But the imbalance between supply and demand is expected to create further pressure on tenants, especially in high-demand areas.
SOUGHT-AFTER LOCATIONS
According to Chestertons’ analysis, Wandsworth and Richmond were among the most sought-after locations in January, reflecting a broader trend of renters seeking out areas that offer a mix of green space, strong transport links, and vibrant local amenities.
The demand for these locations highlights the continued appeal of outer London boroughs as tenants look for better value for money while maintaining easy access to central London.
Broader market trends suggest that rental demand is likely to remain high throughout the year.
The capital’s rental market continues to be shaped by evolving working patterns, immigration trends, and housing policies, all of which will play a crucial role in determining future pricing and availability.
If supply fails to keep pace with demand, renters could find themselves facing heightened competition and rising rents as 2025 progresses.
MORE COMPETITION
Adam Jennings, head of lettings at Chestertons, says: “From the very beginning of January, our branches have been receiving a high level of enquiries from tenants, which picked up even further towards the end of the month.
“Some of this uplift is due to rents having coming down slightly in the second half of last year and savvy tenants recognising that now is a good time to lock-in a deal, while rents are still down from the highs we saw previously.”
And he adds: “Whilst demand for rental properties is on the up, the number of available properties has remained at 2024 levels, which means more tenants will be competing for the same property.”
