Prime London rents returned to annual growth in May as average values rose 2.7% and lets agreed jumped 16.6%, according to fresh LonRes data pointing to a firmer top-end rental market after a quieter spell.
New instructions were up 28.7% on a year earlier and available rental stock was 23% higher at the end of May, suggesting supply is rebuilding even as tenant activity improves. That combination matters because it hints at a market recovering from low volumes rather than simply squeezing higher through scarcity alone.
For landlords and investors, the fresh angle is that rental growth has picked up again in a part of the market where sales conditions have stayed more hesitant. If that pattern holds, some owners may decide the income case looks better than selling into a softer buying market.
Prime lets and instructions both moved higher in May
Landlord Today, citing LonRes, said average rental values in prime London posted their fastest annual rise since last August. At the same time, the number of lets agreed and the flow of new instructions both moved sharply higher from weak comparative levels a year ago.
That points to a market with more movement on both sides. Landlords appear more willing to list property, while tenants at the upper end are still doing deals despite a wider economic backdrop that remains uncertain.
This follows Residential Landlord’s May analysis of stronger rental forecasts against a softer sales market, where letting demand looked more resilient than house price momentum. The latest prime London figures suggest that split is still visible at the top end of the market.
It also connects with Residential Landlord’s recent coverage of weaker pricing signals in the wider sales market. For some investors, a stabilising rental market with recovering activity may look more attractive than chasing a sale.
The underlying market update is referenced via the LonRes May 2026 rental market update.
Why the sales-market backdrop still matters
Landlords should be careful not to over-read one month of data. Prime London rental growth has been subdued over the past three years compared with the surge seen earlier in the cycle, and more stock on the market can still cap future rent rises if demand cools again.
Even so, the recovery in transactions matters. A rental market does not need explosive growth to be useful to investors. It needs liquidity, stable demand and enough pricing power to keep yields from slipping.
Opinion
The more interesting part of this update is the rise in activity, not just the 2.7% rent figure. Prime London landlords do not need another boom story. They need evidence that stock is moving again and that holding for income still beats forcing a sale into a patchy market.
