London's rental market experienced a notable turnaround in September, with tenant demand rising 7% compared to the same period last year. This reverses a trend seen during the first eight months of 2026, when demand was, on average, 7% below 2025 levels.
The increase in demand coincides with a reduction in available rental properties in the capital, which are 10% lower than a year ago. Across Great Britain, rental supply has seen a marginal increase of 0.4%.
Average advertised rents in London have reached £2,763 per month, marking a 3.1% increase year-on-year. This contrasts with the national average of £1,578, which saw a 2.4% annual rise.
Smaller properties are largely driving London's renewed demand, with enquiries for studios and one-bedroom properties up 10% compared to last year. Demand for two-bedroom homes increased by 6%, and three-bedroom properties saw a 2.5% rise.
Rightmove suggests that some prospective first-time buyers may be delaying purchases due to affordability challenges and higher mortgage rates. This could be encouraging some individuals to remain in the rental sector for longer.