Surging Rental Market in London: A Positive Trend Returns

After facing three consecutive months of decline, London’s rental market has finally seen a positive shift as growth returned to one of the city’s most expensive property segments in March. According to property data consultancy LonRes, this rebound is indicative of a stronger demand, particularly at lower price points where supply remains limited.

Increased Rental Values and Demand

The average rental values in London increased by 0.3% on an annual basis this March, marking a return to growth. Notably, rentals are currently 33.2% above their pre-pandemic averages from 2017 to 2019. This information is reassuring for landlords and investors alike, suggesting that the rental market may be recovering more robustly than previously anticipated.

Sustained Growth in Lettings

Furthermore, LonRes reported a significant annual rise in rental activity with a 36.3% increase in lets agreed and an impressive 61.7% jump in new instructions. This is a clear signal that interest from potential tenants is on the rise, which could be beneficial for both property owners and the overall housing market.

Strengthening Market Fundamentals

The available rental properties saw a notable increase as well, with 48.4% more homes on the market across prime London at the end of March compared to the same time last year. This indicates that listings are recovering, which contrasts with the previous period when agents found it unnecessary to list properties due to the high demand.

Reduced Time on the Market

The average time taken between listing a property and tenants moving in also points to a strengthening demand. In Q1 2026, the average wait time across all price points decreased to 62 days, quicker than both the previous year and the long-term average of 69 days. While the higher-end market has seen longer letting periods, properties at lower price points are moving more quickly, showcasing robust ongoing demand.

In summary, the rental growth rebound in London highlights a positive turning point in the real estate market. With an upward trend in rental values and sustained demand for rental properties, the outlook for both landlords and tenants appears promising.