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The London rental market has demonstrated notable resilience despite the introduction of the Renters’ Rights Act, according to recent analysis by a leading lettings agency. Rental yields across the capital have increased modestly over the past year, signalling continued opportunities for buy-to-let investors amid ongoing economic uncertainties.

Rising Rental Yields Reflect Market Strength

Data from Benham and Reeves reveals that the average rental yield in London has risen to 5% in 2026, up from 4.9% the previous year. This incremental growth suggests that, despite legislative changes and broader economic challenges, demand for rental properties remains robust in the capital. The agency highlights that this yield increase underscores the rental market’s ability to adapt and maintain investor appeal.

Such resilience is particularly significant given the introduction of the Renters’ Rights Act, which has brought new obligations and protections for tenants. While some landlords and agents expressed concerns about potential impacts on rental returns, the latest figures indicate that rental income remains attractive in many parts of London.

Top Performing Boroughs for Buy-to-Let Investors

Tower Hamlets currently leads London’s rental yield rankings, offering an estimated gross yield of 6.3%, up from 5.5% a year earlier. This surge is attributed to a combination of declining property values and sustained rental demand, creating favourable conditions for investors seeking income returns. Similarly, Newham has seen its rental yield increase to 6%, rising from 5.2% in 2025, positioning it as the second most profitable borough for landlords.

These boroughs have experienced the most significant annual yield growth in the capital, each recording an increase of 0.8%. The trend reflects a shift where areas with softer house price growth but strong tenant demand are becoming increasingly attractive for buy-to-let investment.

Lower Yields in Prime Central London Areas

Conversely, traditionally prime locations such as Kensington and Chelsea continue to offer lower rental yields, currently estimated at 3.4%. Although this represents a slight improvement from previous years, the higher property values in these areas generally result in reduced income returns for landlords. Richmond upon Thames also falls into this category, where capital appreciation rather than rental income tends to be the primary investment focus.

These boroughs remain appealing for investors prioritising long-term property value growth over immediate rental yield. The disparity between central and outer London boroughs highlights the diversity of investment strategies within the capital’s rental market.

Minimal Yield Declines in Select Boroughs

Only two London boroughs, Brent and Waltham Forest, have experienced slight reductions in rental yields over the past year, each seeing a decrease of 0.1%. While this decline is modest, it may reflect localised market conditions or shifts in tenant demand. Landlords in these areas should monitor market trends closely to assess potential impacts on rental income.

Overall, the limited number of boroughs with falling yields suggests that the London rental market remains broadly stable, with most areas maintaining or improving their attractiveness to investors despite regulatory changes.

What This Means for Landlords

For landlords operating in London, the current market data indicates that rental properties continue to offer viable income opportunities, particularly in boroughs where property prices have softened but tenant demand remains strong. The resilience of rental yields suggests that the Renters’ Rights Act has not significantly deterred rental income prospects in the capital.

However, landlords should remain vigilant regarding compliance with new tenant protections introduced by the Act, as well as evolving market dynamics. Understanding local rental yield trends can help landlords make informed decisions about portfolio management, rent setting, and investment focus.

What TLA Members Should Consider

• Review rental yields in your property’s borough to assess current income potential and compare with market averages.
• Ensure full compliance with the Renters’ Rights Act, utilising resources such as the TLA RRA compliance pack to understand your obligations.
• Consider the balance between rental income and capital growth when evaluating investment strategies, especially in prime central London locations.
• Monitor local market conditions and tenant demand trends to anticipate changes in rental yields and void periods.
• Engage with letting agents who have strong local market knowledge to optimise rent levels and tenant retention.
• Stay informed through TLA training and updates to navigate regulatory changes effectively; explore the TLA Academy for relevant courses and guidance.

TLA Training Academy

The Landlord Association provides structured guidance, compliance education and practical support for landlords, letting agents and property professionals. Members can access training and resources designed to help them stay organised, informed and prepared.

Landlords can explore the Academy here: https://landlordassociation.org.uk/tla-academy/

Those looking to join and access member support can register here: https://landlordassociation.org.uk/get-started-with-the-landlord-association/

TLA update

The Landlord Association is continuing to expand its support, resources and partner network for landlords, tenants, agents and property professionals across the UK. Service providers interested in working with TLA can register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/