Average asking rents have risen to £557 a week, new figures have revealed.
Lettings agents Foxtons said the figure for February was slightly higher than last year.
It insisted that the lettings market “remains resilient” with strong rental demand and steady supply contributing a “balanced landscape” for tenants and landlords.
It went on to reveal that there was at an average of 13 applicants per instruction in February, which is in line with January’s levels.
Year-on-year, North London experienced a notable 16% increase in new renters per instruction, reaching an average of 17 applicants per property.
Meanwhile, more than a third of renters have secured properties at or above their budget in the year to date in 2025, reflecting strong competition in the market.
The average tenant spent 98% of their budget, a slight 1% increase from January.
North London saw a notable 5% month-on-month rise in tenant spending, aligning with the region's increase in demand.
Gareth Atkins, of Foxtons, said: “The rental market in 2025 is showing a more measured pace compared to the intense competition of previous years.
“Tenants are no longer making snap decisions to beat out the competition and are instead taking more time to explore their options and compare neighbourhoods before committing.
“At the same time, landlords are adjusting to evolving renter expectations by maintaining well-presented properties and setting competitive pricing.
“With the upcoming Renters’ Rights legislation, the market is expected to further emphasise quality and value.”
It comes as the Office for National Statistics also published its monthly private rents index, showing a slowdown in the rate of growth.
It said the average UK monthly private rents increased by 8.1% to £1,326 in the 12 months to February 2025, down from 8.7% in the 12 months to January 2025.
Nathan Emerson, of the industry trade body Propertymark, said: “Propertymark recognises that the UK Government’s aim is to safeguard renters and give them greater security.
“However, an unintended consequence of continued legislation placed on landlords is a real concern echoed across the industry as overly prohibitive regulations will likely contribute to a reduced supply of rental homes, an increase in rent prices, and make it harder for people to find affordable housing.”
Meanwhile, Richard Donnell, of Zoopla, added: "Rental inflation has slowed as affordability pressures start to bite on renters, especially in London and some of the bigger UK cities, while stronger demand from first time buyers to buy homes has eased the demand for rented homes."
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