London landlords return to PRS as rental growth gathers pace

Landlords in London are beginning to return to the market as tenant demand has increased, according to new research.

Data by Chestertons reveals one in four landlords who put their properties up for sale have relet them.

The estate agents also claim many landlords have successfully assessed achievable rents following the Renters’ Rights Act.

Encouraging landlords to retain their properties

According to the data, the number of properties subject to rent reductions fell by 36% year on year in May.

Small increases of 6% and 1% followed in June and July respectively, with no change in August.  September brought a further annual decline of 20%.

Adam Jennings, head of residential at Chestertons, said: “There are encouraging signs that London’s sales market is stabilising.

“Stronger rental growth may be encouraging some landlords to retain their properties, helping to bring supply and demand into better balance.”

However, conditions continue to vary across London. Chestertons’ regional figures show rents rising by 6.6% in South West London and viewings increasing by almost 20% in North and East London.

Katinka Hill, head of lettings at Chestertons, said: “We are still assessing how the Renters’ Rights Act is influencing tenant behaviour.

“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.”

Rent increase limited to once per year

The data also points to an increase in tenant demand, with Chestertons recording a 14% rise in tenant portal enquiries and a 3% increase in move-ins.

Rightmove’s rental trends tracker also shows that annual rental growth in London accelerated from 0.8% in Q4 2025 to 1.4% in Q1 2026 and 2.9% in Q2 2026, taking average advertised rents to £2,791 per month.

However, growth remains well below the annual peak of 16% recorded in Q3 2022.

Under the Renters’ Rights Act, landlords are limited to one rent increase per year and must give tenants at least two months’ notice and must follow the Section 13 process each time they increase the rent.

Ms Hill added: “With rent increases limited to market level once a year, landlords need to base reviews on clear evidence of what comparable properties are achieving.

“Although demand has increased, tenants no longer have a fixed deadline to move at the end of their tenancy. 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.”

Harder for rogue landlords to operate under PRS Database

The estate agents also claim the upcoming PRS Database will make it harder for rogue landlords to operate.

Under the PRS Database, landlords will be required to provide information about their properties, including the address, number of residents and bedrooms, as well as copies of gas, electricity and EPC documents.

Dirk Dette, director of compliance at Campions Group, Chestertons’ parent group, says: “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.

“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.”

However, as previously reported by Property118, industry bodies have raised concerns about landlord data privacy and how personal information will be stored, accessed and managed under the PRS Database.