Prime London records fastest rent rises in 18 months

Prime London records fastest rent rises in 18 months

Prime London rental values rose by 4.6% annually in September, marking the fastest growth in 18 months, while lettings activity showed mixed trends with fewer lets agreed but more new instructions.

Prime London’s rental market saw a significant increase in average rents in September 2026, according to data from property consultancy LonRes. The annual growth rate of 4.6% is the fastest recorded in the last year and a half, pushing average rental values to 43.5% above pre-pandemic levels from 2017 to 2019.

Despite rising rents, the number of lets agreed fell by 14.9% year-on-year, indicating a slowdown in completed tenancies. Conversely, new rental instructions increased by 3.4%, suggesting landlords are bringing more properties to market. The overall stock of available rental homes was 6.9% higher than the previous year, though still below historical norms.

LonRes data highlights Renters Rights Act impact on prime lettings

The Renters Rights Act (RRA) continues to influence the prime London rental market, with its provisions not applying to tenancies where annual rent exceeds £100,000. This exemption has created a bifurcated market within prime central London, where a growing proportion of lettings fall above this threshold.

In areas such as Mayfair and St James’s, 36% of properties let in 2026 have rents exceeding £100,000, while Knightsbridge, Belgravia, and South Kensington also see over 20% of lettings above this level. This segmentation means that some landlords and tenants operate outside the RRA’s enhanced tenant protections, potentially affecting supply and demand dynamics.

Nick Gregori, head of research at LonRes, noted that the RRA is likely influencing both supply and pricing. Some landlords have exited the market due to the new regulations, reducing available properties and increasing competition. Those remaining may be seeking higher rents to offset perceived greater tenant rights, contributing to the rental growth observed.

Context of rental growth amid regulatory change

The prime London rental market’s recent performance reflects broader shifts following the introduction of the Renters Rights Act, which aims to strengthen tenant protections but has also prompted some landlords to reconsider their participation. The exemption for very high-value tenancies creates a dual market, with differing regulatory environments depending on rent levels.

This duality complicates the market, as landlords in exempt segments may operate with more flexibility, while those under the RRA face stricter rules. The increase in rental values above pre-pandemic averages highlights the premium landlords are placing on properties, possibly to compensate for regulatory burdens or reduced supply.

At the same time, the rise in new instructions suggests landlords are cautiously optimistic or responding to higher rents by listing more properties, though the drop in lets agreed may indicate tenant hesitancy or affordability constraints.

Practical implications for landlords and letting agents

For landlords with prime London properties, understanding the impact of the Renters Rights Act and its exemptions is essential. Those with properties above the £100,000 annual rent threshold operate in a different regulatory framework, which may affect tenancy agreements, eviction processes, and rent-setting strategies.

Letting agents should be aware of the market segmentation and advise clients accordingly, particularly regarding compliance with the RRA for lower-value tenancies. Monitoring local rental values and stock levels will be important to balance competitive pricing with tenant demand.

Landlords may also need to review their portfolios to assess whether exiting the market or adjusting rents is the best response to the evolving regulatory environment. The mixed signals in activity—more new instructions but fewer lets agreed—suggest that tenant demand may be sensitive to rising rents and regulatory changes.

Uncertainties and what to watch next

It remains unclear how the Renters Rights Act will continue to influence landlord behaviour and market dynamics over the coming months. The proportion of exempt high-value lettings is rising, but the long-term effects on supply and affordability in prime London are yet to be fully realised.

Landlords and agents should watch for any government updates or potential amendments to the RRA that could alter the scope of exemptions or introduce new compliance requirements. Changes in economic conditions, such as interest rates or inflation, could also impact rental affordability and demand.

Keeping abreast of local market data and regulatory developments will be crucial for managing risk and making informed decisions in this evolving environment.

Considerations for landlords amid prime London rental shifts

• Review tenancy agreements to ensure compliance with the Renters Rights Act where applicable, particularly for properties below the £100,000 annual rent threshold.
• Monitor rental market trends closely to adjust rent levels competitively without pricing out potential tenants.
• Assess portfolio composition to understand exposure to exempt and non-exempt tenancies under the RRA.
• Stay informed about changes in legislation or guidance affecting landlord obligations and tenant rights.
• Maintain clear records of communications, rent reviews, and compliance actions to support any future disputes or inspections.

Supporting landlords through regulatory changes with TLA

The Landlord Association (TLA) offers members access to detailed compliance resources and practical guidance tailored to the evolving rental market and regulatory environment. With the Renters Rights Act influencing prime London lettings, TLA’s support can help landlords and letting agents stay informed and organised.

TLA’s new property management and compliance platform, ORBIT, currently in BETA testing, is designed to assist with managing rental documentation, recording key actions, and accessing up-to-date compliance information. This platform aims to bring together property management and regulatory requirements in one place, helping landlords maintain evidence of compliance and prepare for new obligations.

Exploring TLA membership provides access to these resources and tools, which are particularly useful for landlords navigating the complexities of the Renters Rights Act and market segmentation in prime London.

Keeping records of rent levels, tenancy agreements, and compliance steps will be increasingly important as the market adjusts to these regulatory changes.

Looking ahead, landlords should remain vigilant to further market shifts and regulatory updates, ensuring their portfolios are well-positioned to respond effectively.

Sources: Letting Agent Today