February provided more evidence that constrained supply may be feeding into higher rents in the prime London lettings market, says data consultancy LonRes.  

Annual rental growth increased to 6.0% – the highest in 16 months – and took rents to 33.3% above their 2017-2019 pre-pandemic average. 

LonRes says that as February 2020 was the last month before the prime London lettings market was disrupted by the pandemic, there are some five years of data to look back on.  

Broken down by property type, rental values for all categories are more than 20% ahead of their level from five years ago.  

Rental values for houses withstood the impact of the pandemic best, avoiding the second dip in 2021 and getting back to February 2020 by August 2021.  Flats quickly followed and all sizes overtook houses in late 2022.  Since then, rental rises have been more muted but all types have seen further growth.  Over the past 12 months, 3+ bed flats have seen the largest rises, with annual growth reaching 13.9% in February 2025.

LonRes data for February indicated an annual decrease of 42.1% in lets agreed and a 29.4% decrease in new instructions, with activity on both measures remaining well below pre-pandemic levels.  

The stock of available rental properties decreased on an annual basis, with 19.9% fewer homes on the market across prime London at the end of February than a year earlier.  A part of all these decreases in measured activity can be explained by fewer rental properties being advertised rather than truly not being available, but alternative data sources also indicate significant drops in supply relative to longer-term trends.