London’s property market has entered 2026 with renewed momentum as tight rental supply continues to push rents higher and early signs of pent-up buyer demand return.
Latest data from Chestertons shows tenant enquiries in January were 81% higher than in December, despite being 6% lower year-on-year.
The number of tenants moving into properties rose 15% annually, underlining sustained activity across the lettings sector.
Supply remains constrained, with 4% fewer rental properties available than a year ago.
TIGHT AVAILABILITY
Although new lettings valuations doubled compared with December, availability remains tight enough to keep the market competitive and support further rental growth.
Wider indicators point in the same direction. The latest Residential Market Survey from the Royal Institution of Chartered Surveyors shows landlord instructions falling at a faster pace than tenant demand, with forecasters including Rightmove and Zoopla predicting rental growth of between 2% and 3% this year.
SALES ENQUIRIES UP
At the same time, buyer demand is showing clear signs of recovery following months of uncertainty ahead of November’s Budget.
Chestertons reports that sales enquiries in January were up 96% on December, with viewings rising 101% month-on-month. Although slightly below January 2025 levels, the figures mark a sharp turnaround from the autumn slowdown.
RICS data supports the shift in sentiment, with a net balance of 22% more agents expecting sales volumes to rise over the year ahead — the most positive reading since October 2024.
HEALTHY MARKET
Gary Howorth, Regional Sales Director at Chestertons, says: “Our latest data shows that buyer interest is steadily returning after a period of uncertainty.
“Enquiries and viewings are picking up, creating a healthy and competitive market, and a positive environment for both buyers and sellers.”
Adam Jennings, Head of Lettings at Chestertons, adds: “Our latest figures show tenant demand remains stable, supported by strong corporate interest, while rental supply continues to be limited in certain areas.
“This combination is keeping the London lettings market highly competitive, with properties priced in line with the market attracting multiple enquiries from high-quality tenants.
“With demand expected to rise towards spring, now is an excellent time for landlords to bring their properties to market.”
