Prime London rents have accelerated again, with Savills reporting annual growth of 1.9% in prime central London and 2.9% in outer prime areas in its Autumn/Winter 2026 prime residential review, published this week.
The central London figure marks the strongest quarterly rental growth in the capital’s top postcodes for two years, signalling renewed momentum after a subdued period. Outer prime London added 0.9% over the latest quarter alone.
Behind the headline gains sits a supply story that should interest landlords well beyond the prime postcodes. Savills found growth strongest below the £100,000 annual-rent threshold that defines the Renters’ Rights Act’s scope, where landlord caution has thinned available stock and sharpened competition between tenants.
RRA caution constrains supply
Almost half of Savills agents named the Renters’ Rights Act as the key issue facing landlords, ahead of increased taxation on property investment income and higher mortgage costs. Its impact has split the market: where landlords feel most exposed to regulatory change, listings have tightened and rents have responded.
Jessica Tomlinson, research analyst at Savills, said: “There are signs that landlord caution is continuing to constrain rental supply, particularly in the lower rental value bands where pressure is most acute.”
She added that the squeeze is supporting rental growth for now, although affordability limits continue to cap how fast rents can rise, and that it remains too early to judge the full legacy of the Act. The figures behind the assessment come from Savills Prime UK Residential research for Autumn/Winter 2026.
Demand signals stay firm
The prime findings sit alongside exceptionally tight conditions in the wider London market. Knight Frank’s October analysis found 8.9 tenants chasing each new outer London rental, while record advertised rents at national level confirm demand is holding even as affordability bites.
The gap between the two prime bands is itself telling. Outer prime growth at 2.9% is running well ahead of the 1.9% central figure, which points to tenants trading space and relative value over prestige postcodes. For landlords it underlines where the deepest demand now sits: well-kept family stock in outer zones rather than trophy flats in the centre, where high stamp duty and weak sales growth continue to weigh on investor arithmetic.
Yields find support, with limits
This follows Residential Landlord’s September report on UK rents hitting a fresh record of £1,387, which showed stock shortages, not surging tenant incomes, doing the heavy lifting on rent growth. Taken with the Knight Frank demand data, the combined picture suggests constrained supply is now the single biggest prop under London yields.
The caveat matters as much as the headline. Affordability ceilings are already slowing the pace of increases, and rents bought by retreating supply are fragile: if cautious landlords return, or if stretched tenants simply cannot pay more, today’s growth flattens fast. Landlords pricing renewals above local earnings growth risk longer voids that wipe out the uplift.
Renewal strategy needs care in this climate. The full dataset sits in Savills Prime UK Residential review for Autumn/Winter 2026. With rent reviews now generally limited to once a year, an over-ambitious increase that pushes a good tenant out can cost more in void time and re-let fees than a steadier rise banked with certainty. Agents report tenants are pushing back harder on increases that outrun earnings, even in short-supply postcodes.
Opinion
Prime rents rising because landlords are holding stock back is good news with an expiry date. The RRA-driven caution supporting today’s figures is the same caution shrinking the sector, and policymakers will eventually notice the connection. Landlords enjoying the uplift should bank it, review portfolios while demand is hot, and avoid mistaking a supply squeeze for a lasting boom.
