London’s Rental Market Sees Encouraging Growth: A Positive Shift in Property Dynamics

In an uplifting development for London's rental market, data from consultancy firm LonRes indicates a return to positive rental growth for the city's most expensive properties. After experiencing three consecutive months of decline, the average rental values saw a slight increase of 0.3% year-on-year in March, signaling a potential recovery.

Strong Demand Amidst Supply Constraints

LonRes's findings suggest that demand for rental properties remains robust, especially at lower price points where availability is limited. As the post-pandemic rental landscape continues to evolve, average rents are currently 33.2% higher than the pre-pandemic levels recorded between 2017 and 2019. Such figures are encouraging for landlords and property investors alike, as they reflect a resilient market responding positively to ongoing demand.

Rising Activity in Rental Agreements

The consultancy also reported an impressive annual increase of 36.3% in properties let and a remarkable 61.7% surge in new instructions as of March. This surge indicates a noteworthy revival in transaction activity, suggesting that prospective tenants are ready to engage in the market once again.

Increasing Availability of Rental Properties

Interestingly, despite the increase in demand, the stock of available rental properties has shown substantial growth. The market saw a 48.4% boost in listings across prime London year-on-year. This uptick can be attributed to a recovering listing process, revealing a market that was constrained rather than devoid of properties in earlier months.

A Look Ahead

As we assess the average time properties spend on the market, the data from the first quarter indicates that prospective tenants are moving faster than in prior years. With an average of 62 days between listing and move-in, the pace is quicker than observed in Q1 2025. This behavior, especially at lower price points, reinforces the notion of rising demand and a promising outlook for the rental market moving forward.