Tenant demand continues as property market rebounds

Tenant demand continues to rise as more landlords return to London’s rental market, according to a new report.

Chestertons lettings index reveals tenant demand increased in August as growing numbers of landlords brought properties to London’s rental market three months after the Renters’ Rights Act took effect.

The London property sales market is also seeing growing confidence ahead of the Autumn Budget, with market sentiment improving among buyers and sellers.

Increase in activity

According to the data, enquiries from prospective tenants increased by 13% year-on-year.

Year-on-year enquiries had fallen during each of the five months leading up to the introduction of the Act on 1 May, before rising by 17% in May and 10% in June. After slipping to -7% in July, demand rose sharply again in August.

Meanwhile, new landlord instructions increased by around 6% year-on-year.

Katinka Hill, head of lettings at Chestertons, said: “August brought an increase in activity across London’s rental market, which doesn’t surprise me and is in line with usual seasonal trends. We also expect this momentum to continue into September now that schools have returned and people are back from holiday.

“Achieved rental prices are holding firm, which is a positive sign. A notable trend we’ve seen since the Renters’ Rights Act took effect on 1 May is that tenants are taking longer to make decisions, weighing up their options more carefully. This is because they have increased flexibility to move, and there are plenty of quality homes to choose from.’’

Positive outlook for property market

Buyer enquiries in the sales market are improving year-on-year, with more homeowners coming to market.

At the same time, vendor instructions increased by 14% year-on-year, signalling growing confidence among sellers and bringing more homes to the market ahead of the autumn selling season.

Ahead of the Autumn Budget, Chestertons claims there has been less media speculation about possible tax changes ahead of Chancellor John Healey’s Budget on 28 October than there was in the run-up to the November 2025 Budget.

Adam Jennings, Head of Residential at Chestertons, said the outlook is positive for the property market.

He said: “Months of rumours about potential tax changes, many of them related to property, impacted activity levels in the housing market last year, particularly in the capital.

“After a challenging few months in London’s property market, greater clarity around the economic outlook is helping to support confidence among buyers and sellers.

“Combined with improving consumer sentiment and the renewed activity we are seeing across our London network, there are reasons to be optimistic about the market’s trajectory in the months ahead.”