## Tenancy Renewals Increase as Rental Supply Contracts

Recent data from Chestertons highlights a notable shift in London’s private rented sector (PRS), with tenancy renewals rising by 16.2% month-on-month in February. This increase indicates that a growing number of tenants are opting to stay put rather than relocate, contributing to a tightening rental market. Meanwhile, the supply of available rental properties in London has fallen by 5.4% year-on-year, further intensifying competition for lettings.

New landlord instructions have seen a modest rise of 2.8% year-on-year, adding some fresh stock to the market. However, this small increase has not been sufficient to offset the overall decline in rental availability. For landlords, this environment suggests a continued opportunity to maintain or potentially increase rental values due to limited supply and sustained tenant demand.

## Resilience in London’s Private Rented Sector

Adam Jennings, Head of Residential at Chestertons, commented on the market’s performance: “London’s rental market continues to demonstrate resilience. The notable increase in tenancy renewals shows that many tenants are choosing to stay in their current homes, while the rise in new instructions highlights that landlords continue to recognise the strong long-term fundamentals of the capital’s lettings market.”

Jennings also noted the impact of constrained supply on rental values: “With supply remaining constrained across much of London, we expect rental values to stay well supported in the coming months.” This outlook is significant for landlords and letting agents, indicating that despite broader economic uncertainties, the London rental market remains robust.

## Signs of Recovery in London’s Sales Market

Alongside lettings, London’s sales market showed early signs of recovery in February following a period of subdued activity ahead of the late November Budget. Terms agreed on sales rose by 30.9% month-on-month, while new sales instructions increased by 7.3%. Although portal enquiries declined by 3.3% year-on-year, this was an improvement compared to a 6.3% fall in January.

Activity related to viewings, offers, and exchanges also experienced smaller year-on-year declines than in the previous month. Adam Jennings observed: “Improving affordability in London, along with the early signs of returning buyer activity, suggests that the market is gradually regaining momentum. Our data shows buyers and sellers are starting to re-engage and we expect this cautious optimism to support a steady strengthening of activity over the coming months.”

## What This Means for Landlords and Letting Agents

The increase in tenancy renewals combined with a reduction in rental supply suggests that landlords in London may benefit from lower void periods and potentially stronger rental income stability. For letting agents, the trend emphasises the importance of tenant retention strategies and maintaining good landlord relationships to capitalise on the resilient demand.

The modest rise in new landlord instructions indicates some confidence remains among property owners, but the overall supply constraints mean landlords should be mindful of market conditions when setting rents. The improving sales market could also influence future lettings supply, as more transactions may eventually lead to changes in rental stock availability.

Suggested internal link anchors
– tenancy renewals
– rental supply in London
– private rented sector resilience
– landlord instructions
– rental values
– London sales market
– tenant retention strategies
– rental market trends
– property management
– landlord confidence
– lettings market fundamentals
– rental income stability

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/