London rents climb as supply stays tight

London’s PRS has started the year on a firm footing, with restricted stock and steady renter interest continuing to drive rental growth, Chestertons reveals.

It says that activity across the capital remains robust and tenant enquiries in January were 6% lower than the same month in 2025.

However, the figure is 81% higher when compared with December 2025, pointing to renewed momentum after the festive slowdown.

The number of renters securing homes also rose, climbing 15% year-on-year, underlining the pace of transactions across the market.

Tenant demand is stable

The firm’s head of lettings, Adam Jennings, said: “Our latest figures show tenant demand remains stable, supported by strong corporate interest, while rental supply continues to be limited in certain areas.

“This combination is keeping the London lettings market highly competitive, with properties priced in line with the market attracting multiple enquiries from high-quality tenants.”

He added: “With demand expected to rise towards spring, now is an excellent time for landlords to bring their properties to market.”

Rental home numbers fall

Available stock, however, remains constrained as listings were down 4% compared with last year.

At the same time, lettings valuations doubled month-on-month, suggesting more owners are weighing up entering the market during the first quarter.

The mismatch between demand and supply is sustaining competition, pushing up rents and returns.

For landlords, the backdrop remains supportive as limited choice continues to sharpen bidding among prospective tenants.

RICS survey of PRS

Chestertons says that its findings mirror those found in the recent Royal Institution of Chartered Surveyors’ residential market survey.

It found a net balance of 27% more agents saw tenant demand falling rather than rising.

Landlord instructions dropped further, registering a net balance of -39%, highlighting the contraction in rental supply.

RICS expects rents to grow around 3% this year, while property portals Rightmove and Zoopla anticipate rises of 2% and 2.5% respectively.

London home sales up

Chestertons also reports that alongside rental strength, sales activity is showing early signs of recovery following political and fiscal uncertainty late last year.

January figures indicate buyer interest is returning.

Portal enquiries, which tend to be the first step in a purchase, were just 6% below January 2025 levels but jumped 96% compared with December 2025.

Viewing numbers followed suit, rising 101% month-on-month, signalling renewed engagement from prospective purchasers.