In July, the prime London lettings market saw the strongest rental growth in 18 months, while activity increased slightly.

LonRes data for July indicated an annual increase of 1.5% in lets agreed and a 3.6% increase in new instructions.  

The stock of available rental properties increased on an annual basis, with 6.8% more homes on the market at the end of July than a year earlier.  

Average rental values increased by 5.3% on an annual basis in July, the strongest performance since February 2025.  Average rental values were 41.0% above their 2017-2019 (pre-pandemic) average. 

All three main catchment areas* recorded similar rates of annual growth in July, but this follows significant variation at the start of the year.  

Prime central London has seen the largest turnaround, moving from a 3.7% fall in February to a 5.7% rise in July.  The outer areas have seen steadier growth in recent months. 

LonRes suggests that it is possible that the changes introduced by the Renters’ Rights Act have quickly led to higher rental growth.  

Before its introduction it was predicted that supply could tighten and that asking rents would increase in response to the banning of ‘bidding wars’.  

The increase in rental growth has coincided with the Act’s May start date, but the largest improvement has been seen in PCL, where the highest proportion of properties – more than 20% in 2026 so far – are exempt from the Act due to annual rent being over £100,000.