Tenant demand in London has risen by 7% year-on-year, marking a reversal after previously trailing 2025 levels. This increase contrasts with the national picture, where overall tenant demand across Britain remains 2% below last year's levels, according to Rightmove data.
London is one of only two regions to record annual growth in rental enquiries, with the North East seeing a 1% increase. The upturn in London's rental demand began on 7 September and has continued since.
This rise in demand comes despite a 10% year-on-year reduction in available rental properties in London. This supply-demand imbalance has contributed to higher rental costs, with average advertised rents in the capital reaching £2,763 per calendar month, up 3.1% annually.
Smaller properties are largely driving this demand growth, with enquiries for studio and one-bedroom rental properties in London up 10% year-on-year. Demand for larger properties, such as two-bedroom and three-bedroom homes, has also increased in the capital, by 6% and 2.5% respectively.
Colleen Babcock, Rightmove’s Property Expert, suggested that affordability challenges, including high mortgage rates and the gap between house prices and earnings, may be keeping potential first-time buyers in the rental market for longer.