"With demand expected to rise towards spring, now is an excellent time for landlords to bring their properties to market"
- Adam Jennings - Chestertons
London’s lettings market continues to hold firm, with sustained activity placing upward pressure on rents, according to new figures from Chestertons. Forecasters expect rental growth to continue through 2026.
Tenant enquiries on Chestertons’ lettings portal remained strong in January. Although enquiries were 6% lower than in January 2025, they increased by 81% compared with December 2025, pointing to clear early-year momentum. Over the same period, the number of tenants moving into properties rose by 15% year-on-year, reinforcing signs of a busy and active market.
Supply, however, remains constrained. The number of available rental properties fell by 4% compared with the same period last year. At the same time, lettings market valuations doubled month-on-month from December, suggesting that more owners are considering bringing properties to market in Q1.
Together, steady demand and limited supply are keeping competition high and continuing to support rental growth, creating favourable conditions for landlords.
These local trends reflect wider market signals identified by Royal Institution of Chartered Surveyors in its UK-wide Residential Market Survey. The survey shows that a net balance of 27% more lettings agents reported falling tenant demand than those seeing a rise. However, the net balance of landlords letting properties dropped further, to -39%.
As a result, RICS expects rents to rise by around 3% in 2026. Property portals Rightmove and Zoopla forecast increases of 2% and 2.5%, respectively.
Structural drivers continue to underpin tenant demand across the capital, including London’s diverse workforce, international interest, and the flexibility offered by renting. Combined with tight supply, these factors are sustaining a competitive lettings market and supporting further rental growth.
“Our latest figures show tenant demand remains stable, supported by strong corporate interest, while rental supply continues to be limited in certain areas,” said Adam Jennings, head of lettings at Chestertons. “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. With demand expected to rise towards spring, now is an excellent time for landlords to bring their properties to market.”
Buyer demand begins to recover
Early signs also suggest that pent-up buyer demand is returning after several months of uncertainty linked to the late November Budget.
January data from Chestertons shows that enquiries on its sales portal, the first step in the buying journey, are recovering strongly. While still 6% below January 2025 levels, enquiries increased by 96% compared with December 2025. Viewings, which typically follow enquiries, rose by 101% month-on-month over the same period, indicating a gradual return of market momentum.
National picture
National data points in a similar direction. The December Residential Market Survey from RICS reported a marked improvement in agents’ expectations for sales volumes in 2026, after speculation over higher property taxes eased. The survey found that 22% more agents expected sales to increase than those expecting them to fall, the most positive balance since October 2024. This reversed negative readings recorded between August and November 2025, when media speculation was strongest.
Economic conditions are also helping to support renewed buyer confidence, including:
real wage growth
low and stable unemployment
the Bank of England holding interest rates at 3.75%
improving mortgage affordability
Together, these factors are encouraging households to transact and giving sellers greater confidence to bring properties to market. The combination is supporting a stronger start to 2026, with potential for modest price growth.
“Our latest data shows that buyer interest is steadily returning after a period of uncertainty,” said Gary Howorth, regional sales director at Chestertons. “Enquiries and viewings are picking up, creating a healthy and competitive market, and a positive environment for both buyers and sellers.”
