London rents flatten while some pockets see record annual growth

Rents across the UK reached a new average high of £1,577 per month in August, 3% higher than last year. While availability has improved slightly – up 8% on last year – demand is outpacing supply, keeping upward pressure on rents.

Investor appetite continues to be weak, although buy-to-let lending in the first half of 2025 is up 16% year-on-year. Loans for new rental purchases were strong, jumping 23% compared to a 14% increase in remortgaging, highlighting deals now available to investors which support the sector’s long-term potential.

In London where rents have broadly flattened in recent months, tenants, wary of restricted choice and higher rents, are adopting a cautious approach; many are choosing to extend their tenancies, as evidenced by lease renewals across our 21 London branches, running at 82% in September, up 4 per cent from June.

Our Japan Desk, a key part of our core service offering, achieved record levels of corporate tenancies over the summer months. Thanks to their professionalism and commitment to exceptional customer care, new rental tenancies increased by 14%. Tube fare zones 1 and 2 remain the most sought-after locations for Japanese corporate tenants, with areas such as Hammersmith, White City, and Fitzrovia continuing to perform strongly.

In Prime Central London, although some HNIs reacted to the recent non-domicile tax law changes and have decided to temporarily move overseas, many decided they did want to keep a UK base. Naturally, some of this stock has entered the high-end rental market and our Knightsbridge and Kensington branches are particularly busy negotiating rental leases in excess of £5,000 per week. We are also dealing with an 8% increase in take up for our Vacant Management service which gives owners the confidence that their property is being well looked after in their absence.

We’ve also witnessed the rise of a new breed of younger investor, willing to engage in longer-term thinking. The historic and proven growth of bricks and mortar, particularly in London, is hard to resist. Increasingly UK-based and bringing wealth from risk-hardened sectors such as tech and fintech, the presence of this new raft of rental investor should help ease the rental stock shortage we hope to see coming down the pipeline.

Rents in Wandsworth and Camden see strong annual rises

Parts of South-West London continue to see rental growth, with neighbourhoods such as Wandsworth proving particularly popular thanks to the combination of value, space and lifestyle they offer compared to the core Central London market.

According to the Office of National Statistics, private rents in Wandsworth rose to an average of £2,526 per month in August 2025, an annual increase of 6.9% from £2,362 in August 2024. This was higher than the rise in London (5.7%) over the year making it a compelling location for property investors seeking good long-term returns. Wandsworth’s combination of expansive green spaces and diverse housing stock creates a rental market with wide tenant appeal.

The ONS also reported that private rents in Camden (the Borough, not just the NW1 postcode) averaged £2,793 per month in August 2025, up 11.6% year-on-year (from £2,501 in Aug 2024). Gross rental yields stand near 4.6%, supported by the area’s lifestyle appeal, location, and strong transport links. New apartments to rent at Camden Goods Yard by Berkeley London is having its first completions now. This grand-concept development is already generating good interest from professionals looking for high quality accommodation with an easy commute.

Private landlords remain the solution, not the problem.

Looking ahead, the impending implementation of the Renters’ Rights Bill and ‘possible’ tax changes are creating short-term uncertainty for landlords, but they also underscore the central role of private landlords in the housing market. With demand high, financing conditions improving, and rental yields continuing to rise, the outlook remains positive for investors who are well-positioned to adapt to policy shifts and capture ongoing opportunities in the market.