The lettings market remained resilient in May despite the Renters’ Rights Act being in force for its first full month, with rising demand, improved supply and little evidence of worsening affordability, according to Foxtons .

The latest data from the agency reveals that applicant demand increased 13.7% month-on-month as the market moved into the peak summer lettings season. While activity remained 7.1% below the levels seen a year ago, the increase suggests renter demand continues to recover.

At the same time, competition for available homes eased. The number of new renters registered per new instruction fell 8.6% year-on-year and was down 5.5% compared with April, indicating that improved supply is helping to absorb rising demand.

New listings increased by 3.0% annually and 5.7% month-on-month, providing tenants with greater choice and contributing to more balanced market conditions. The rise in available stock also suggests landlord confidence has remained stable following the introduction of the Renters’ Rights Act.

Affordability showed little sign of deterioration. Average renter budgets rose by just 0.3% year-on-year to £548 per week, although they were up 2.1% compared with April in line with seasonal demand patterns.

The combination of stronger demand, improving supply and stable renter budgets points to a market that has continued to function smoothly despite the introduction of major legislative reforms, with tenants benefiting from greater choice while landlords continue to attract strong levels of interest.

Sarah Tonkinson, managing director, Institutional PRS and Build to Rent, said: “London’s BTR pipeline has grown by nearly 15% this past year, according to the latest sector data. What I’ve seen across Foxtons portfolio squares with that. It is a good market. The demand is there from tenants, but in a competitive market you need to make your offering really clear and work with an agent who has insight across the capital.

“Our Lettings Market Report shows renter activity building month-on-month into the summer peak, reinforcing that the appetite is there. For operators weighing where to commit, the question is not whether renters will come, but whether your proposition is landing clearly enough to capture that demand.”

Foxtons year-to-date key market indicators