Our Q3 2026 quarterly report highlights rising tenant demand, constrained rental supply and improving buyer affordability. London’s rental growth has accelerated over the latest two quarters, while the sales market is showing early signs of stabilisation.
Five months after the Renters’ Rights Act came into force, our figures show increased tenant enquiries and move-ins, alongside evidence that some landlords who had put their properties up for sale have returned to letting.
Meanwhile, independent research shows that we are outperforming the wider sales market on new instructions and sales agreed in the areas we serve.
Annual rental growth in London has strengthened from 0.8% in Q4 2025 to 1.4% in Q1 2026 and 2.9% in the latest quarter, taking average advertised rents to £2,791 per month, according to Rightmove’s Rental Trends Tracker.
This follows a period of slowing growth from the 16% annual peak recorded in Q3 2022. The latest figures indicate that pressure on rents is increasing again, with rising demand and limited availability shaping conditions in the capital.
A similar, although less pronounced, pattern has emerged across the rest of Great Britain. Annual rental growth fell from 11% to 1.6% in Q2 2026 before increasing to 2.3% in the latest quarter. The change in direction came one quarter later than in London.
Separate Rightmove research underlines the difference between London and the national market. Tenant enquiries in the capital increased by 7% year on year in September, while the number of available rental properties fell by 10% over the past 12 months.
London and the North East were the only two regions in Great Britain to record an annual increase in tenant demand in September. Across the country as a whole, enquiries declined by 2%, while available supply increased by 0.4%.
Our own figures show a 14% rise in tenant portal enquiries since the Renters’ Rights Act came into force on 1 May, alongside a 3% increase in move-ins.
While these figures point to an active market, the difference between enquiry growth and completed moves suggests that tenants are taking time to assess their options. Increased interest does not always translate immediately into a new tenancy.
Katinka Hill, our Head of Lettings, says: “Although demand has increased, tenants no longer have a fixed deadline to move at the end of their tenancy. They are taking more time to weigh up their options, and enquiries do not always translate into new tenancies.
“However, our 3% increase in move-ins shows that the market remains reasonably active. This is inevitable as tenants have their own objectives, such as changing jobs or their children’s schools. It’s far less likely to be caused by landlords asking them to leave.”
For landlords, this makes it particularly important to understand the local market and respond to feedback. Strong enquiry levels are encouraging, but the rent, presentation and condition of a property still influence whether interest becomes a tenancy.
Our monthly data suggests that many landlords have successfully assessed achievable rents following the Act.
In May, the number of properties subject to rent reductions fell by 36% year on year. Small increases of 6% and 1% followed in June and July respectively, possibly reflecting landlords adjusting their expectations. There was no change in August.
September brought another year-on-year fall in the number of properties having their rents reduced, this time of 20%. This may reflect another wave of tenancy renewals, although the reduction was smaller than in May.
Katinka says: “With rent increases limited to market level once a year, landlords need to base reviews on clear evidence of what comparable properties are achieving. Our lettings teams can help by providing an objective analysis of rents in the local market.”
These figures reinforce the value of setting a competitive rent from the outset and using current local evidence when reviewing it.
London’s rental market remains competitive, but conditions differ by area. Our regional figures show rents rising by 6.6% in South West London and viewings increasing by almost 20% in North and East London.
For tenants, preparation remains important. Setting a realistic budget, having documents ready and acting promptly when the right home becomes available can help make the process smoother. Considering neighbouring areas may also widen the choice of suitable properties.
For landlords, keeping homes in good repair and maintaining positive relationships with tenants will remain important as the market adapts.
Katinka says: “We are still assessing how the Act is influencing tenant behaviour. However, well-presented properties offered at a competitive rent will continue to attract good tenants. Keeping homes in good repair and looking after tenants will also encourage them to stay longer.
“Over the coming months, I will be watching closely how rents evolve and whether tenants are taking longer to make decisions or choosing to stay in their homes for extended periods.”
The forthcoming Landlord Register is another important development for landlords. Registration will require landlords to provide details about themselves and every property they let, keeping ownership and contact information up to date.
Preparing accurate records and checking existing compliance documents will help landlords get ready for this next stage.
Dirk Dette, Director of Compliance at Campions Group, our parent group, says:
“The database should make it harder for rogue landlords to operate, which is positive for tenants, responsible landlords and the reputation of the wider sector.
“The information being requested largely relates to obligations landlords should already be meeting. The important difference is that compliance will become more visible, making missing documents, expired certificates and inconsistencies between different records easier to identify.”
There are early indications that London’s sales market may be stabilising, reflecting improved affordability, a resilient economy and some landlords returning to letting.
Our analysis of the lettings market following the Renters’ Rights Act indicates that one in four landlords who put their properties up for sale have returned to letting them. Stronger rental growth may be encouraging some owners to retain their properties, helping to bring supply and demand into better balance in the sales market.
This is taking place alongside an improvement in affordability, particularly in London, and signs that the decline in buyer enquiries is easing.
According to Nationwide, the UK house-price-to-earnings ratio has fallen to 5.5, its lowest level in 12 years, from a peak of 6.9 in 2022.
London’s ratio remains higher at 8.6, but has fallen from 11.7 in 2016. The affordability gap between the capital and the rest of the UK is now at its narrowest in ten years.
Although affordability remains a consideration for buyers, these figures indicate an improvement in the relationship between prices and earnings.
RICS reported that UK buyer enquiries continued to fall in August, but the rate of decline eased for the fifth consecutive month. Its outlook for prices over the next 12 months was broadly stable, adding to the signs of emerging stabilisation.
Independent data from TwentyEA shows that we have increased our market share across key sales measures in our operating postcodes.
Over a rolling 12-month period, our new sales instructions increased by 16% year on year, compared with growth of 2.5% across the wider market in those areas.
In September, our sales agreed increased by 31% year on year, while the market in the same postcodes declined by 7.9%.
Adam Jennings, our Head of Residential, says: “There are encouraging signs that London’s sales market is stabilising. Stronger rental growth may be encouraging some landlords to retain their properties, helping to bring supply and demand into better balance. The economic backdrop remains resilient despite global uncertainty, while affordability in London has improved. Independent analysis of our peer group also shows Chestertons outperforming rivals on key measures, including new instructions and sales agreed, in the areas we serve.”
For sellers, a realistic asking price remains essential. If a property is not attracting buyer interest, it is important to review the strategy and consider feedback from viewings.
Where a price reduction is appropriate, one noticeable adjustment can be more effective than a succession of small cuts. Repeated reductions may encourage buyers to wait in anticipation of further changes. Depending on the property and the owner’s circumstances, alternatives may include an auction or short-term letting.
For buyers, improving affordability and signs of stabilisation provide reasons to reassess their options. Those holding out for substantial price reductions could miss opportunities if demand strengthens.
As we move into the final quarter of the year, local conditions will continue to matter. Our teams can help buyers, sellers, landlords and tenants interpret the market in their area and decide on practical next steps.