London's Rental Market Bounces Back: A Positive Trend for 2026

March saw a remarkable shift in London's rental market, with growth returning for the city's most expensive properties. According to property data consultancy LonRes, this resurgence marks an end to three consecutive months of decline, signaling a robust demand that is particularly evident in lower price points where supply continues to be constrained.

Growth Indicators Paint a Promising Picture

Average rental values in March increased by 0.3% annually, a significant turnaround that reflects the resilience of the market. Long-term data reveals that rental prices are now 33.2% above their pre-pandemic averages from 2017 to 2019. Furthermore, the number of lets agreed has surged by 36.3%, and new instructions have skyrocketed by an impressive 61.7%, highlighting an energetic market rebound.

Increased Availability and Quick Turnarounds

Interestingly, the stock of rental properties in prime London has increased significantly, with 48.4% more homes available on the market compared to the previous year. This rise is attributed to a recovery in listings rather than an excess of properties, as agents had previously held back on listing in a strong post-pandemic environment. Time on the market is another indicator of demand, with the average interval between listing and move-in dropping to 62 days in Q1 2026, improving from 69 days noted in previous years.

Price Points and Market Dynamics

When examining the data by rental value, distinct trends emerge. For high-end properties priced above £5,000 per week, the average time to let has lengthened slightly, showcasing a nuanced demand landscape. Conversely, for rental properties priced between £2,000 and £5,000 per week, the market remains in line with long-term averages, and properties at lower price points are seeing quicker turnover, which signals strong ongoing interest from renters.

This positive momentum in London's rental market mirrors broader recovery trends as the city continues to adapt post-pandemic. Stakeholders in the property sector and potential renters alike should keep a close eye on these developments as the market evolves throughout 2026.