Prime rental values across London and key regional markets have continued to edge upwards, driven by constrained supply and sustained tenant demand. New data from Savills shows modest but consistent growth, particularly in outer London and family housing markets. The shift comes as landlords adjust ahead of the Renters’ Rights Act, with some exiting or restructuring portfolios. As a result, availability has tightened, reinforcing upward pressure on rents.
- Prime central London rents rose 1.1% year on year, with outer London up 2.3% and regions up 0.2%
- Quarterly rents increased 0.5% in central London, 0.7% in outer London, and 0.6% regionally
- Lower-value prime homes under £1,000 per week rose 3.3%, outperforming higher-end stock
- Demand for family homes in areas such as Hampstead, Battersea, and Chiswick remains strong
- Regional growth has been led by commuter towns like Farnham and Winchester
Original article source: Mortgage Finance Gazette
Supply is being quietly squeezed. As smaller landlords reassess their position ahead of the Renters’ Rights Act, stock is gradually moving out of the rental sector. That shift alone is enough to support pricing, particularly in prime markets where quality supply is already limited.
Lower-value prime homes are outperforming, and family houses in well-connected London neighbourhoods continue to attract strong competition. This represents a market that is becoming more needs-driven – tenants prioritising space, location, and long-term suitability over purely discretionary moves.
At the same time, international demand is adding another layer of support. Changes to tax rules and ongoing global uncertainty are reinforcing London’s position as a reliable rental destination, particularly at the prime end. For many overseas tenants, flexibility remains key, and renting in central London continues to offer that.
The regulatory backdrop is also accelerating a longer-term shift in landlord profile. Larger, better-capitalised investors are increasingly positioned to absorb policy changes and operate at scale. Over time, this should bring a more stable and professionalised rental sector, particularly in prime locations.
Importantly, while rental growth remains modest, it is consistent. That steady upward pressure, combined with constrained supply, points to a market that is holding firm.
