London rental growth has accelerated, and one in four landlords who put their properties up for sale have since relet them, according to residential property specialist Chestertons.
The agency recorded a 14% rise in tenant portal enquiries and a 3% increase in move-ins in the five months since the main tenancy reforms under the Renters’ Rights Act took effect on 1 May.
Chestertons’ autumn market report also points to early signs of stabilisation in London’s sales market, alongside improving affordability and growth in the agency’s new instructions and sales agreed.
Lettings: rental growth strengthens as supply falls
Rightmove’s Rental Trends Tracker shows London rental growth rising from 0.8% in Q4 2025 to 1.4% in Q1 2026 and 2.9% in Q2, lifting average advertised rents to about £2,800 a month. That follows a slowdown from the 16% annual peak of Q3 2022.
Across Great Britain excluding London, annual rental growth climbed from 1.6% in Q1 2026 to 2.3% in Q2. Rightmove research also shows London tenant enquiries 7% higher year on year in September, with available rental stock 10% lower. London and the North East were the only two regions to record an annual increase in tenant demand. Across Britain overall, enquiries fell 2% and available supply rose 0.4%.
“With rent increases limited to market level once a year, landlords need to base reviews on clear evidence of what comparable properties are achieving,” said Katinka Hill, head of lettings at Chestertons. “Our lettings teams can help by providing an objective analysis of rents in the local market.”
“Although demand has increased, tenants no longer have a fixed deadline to move at the end of their tenancy,” she added. “They are taking more time to weigh up their options, and enquiries do not always translate into new tenancies.
“However, our 3% increase in move-ins shows that the market remains reasonably active. This is inevitable as tenants have their own objectives, such as changing jobs or their children’s schools. It’s far less likely to be caused by landlords asking them to leave.”
Landlords adjust pricing as tenants weigh their options
The monthly figures point to landlords settling on achievable rents following the Renters’ Rights Act. The number of properties subject to rent reductions fell 36% year on year in May, then rose 6% in June and 1% in July. August showed no change, and September brought a further annual decline of 20%.
London rental growth is uneven across the capital. Chestertons’ regional figures show rents rising 6.6% in South West London and viewings increasing by almost 20% in North and East London.
“We are still assessing how the Act is influencing tenant behaviour,” Hill noted. “However, well-presented properties offered at a competitive rent will continue to attract good tenants. Keeping homes in good repair and looking after tenants will also encourage them to stay longer.
“Over the coming months, I will be watching closely how rents evolve and whether tenants are taking longer to make decisions or choosing to stay in their homes for longer.”
Landlord Register rollout starts in December
The forthcoming Landlord Register will require landlords to register themselves and their rental properties, with the regional rollout beginning on 15 December 2026. Chestertons advises landlords to prepare accurate property records, check compliance documents and keep ownership and contact details up to date.
“The database should make it harder for rogue landlords to operate, which is positive for tenants, responsible landlords and the reputation of the wider sector,” said Dirk Dette, director of compliance at Campions Group, Chestertons’ parent group.
“The information being requested largely relates to obligations landlords should already be meeting. The important difference is that compliance will become more visible, making missing documents, expired certificates and inconsistencies between different records easier to identify.”
Sales: affordability improves as the market shows signs of stabilising
Further analysis indicates that one in four landlords who put properties up for sale have returned to lettings, which could bring supply and demand in London’s sales market into better balance. Nationwide’s affordability data shows the UK house-price-to-earnings ratio at 5.5, down from a peak of 6.9 in 2022. London’s ratio stands at 8.6, and the affordability gap between the capital and the rest of the UK is at its narrowest in ten years.
The RICS August Residential Market Survey reported that buyer enquiries continued to decline, but the pace of the fall eased for the fifth consecutive month. The survey’s outlook for prices over the following 12 months was broadly stable. ONS figures recorded a 0.4% increase in monthly GDP in July, following growth of 0.3% in June.
Sales figures against the local market
Independent data from TwentyEA shows Chestertons’ new sales instructions rose 16% year on year over a rolling 12-month period, against growth of 2.5% across the wider market in its operating postcodes. Sales agreed increased by 31% year on year in September, while the market in the same postcodes declined by 7.9%.
“There are encouraging signs that London’s sales market is stabilising,” said Adam Jennings, head of residential at Chestertons. “Stronger rental growth may be encouraging some landlords to retain their properties, helping to bring supply and demand into better balance.
“The economic backdrop remains resilient despite global uncertainty, while affordability in London has improved. Independent analysis of our peer group also shows Chestertons outperforming rivals on key measures, including new instructions and sales agreed, in the areas we serve.”
