London Rental Demand Rises Amid First-Time Buyer Delays

By the Editorial Team · Thursday, October 1, 2026

Rental demand in London rose by 7 percent in September compared to last year, despite a national slowdown in tenant inquiries. This increase is driven by affordability challenges and delays in government support for first-time buyers, resulting in sustained pressure on a shrinking rental supply and higher rents in the capital.

Rental demand in London has increased despite a broader national slowdown, driven in part by delays among first-time homebuyers awaiting the introduction of a revised government support scheme. Analysis by property portal Rightmove indicates that tenant inquiries in the capital rose by 7 percent in September compared with the same period last year. However, demand across the first eight months of 2023 remained approximately 7 percent below levels recorded in 2025.

This rise in rental interest comes amid a tightening supply of available properties in London, where the rental stock declined by 10 percent compared to the previous year. This contrasts with a modest 0.4 percent increase in rental stock throughout the rest of Britain. Outside London, the only other region to experience a growth in tenant demand was Northeast England, which saw inquiries increase by 1 percent year-on-year. In contrast, the overall number of tenant inquiries sent to letting agents across the UK fell by 2 percent compared with last year.

Colleen Babcock, a spokesperson for Rightmove, attributed the increased rental demand in London to affordability challenges facing prospective buyers. “That could be encouraging some movers to stay in the rental sector for longer while they assess their options, save for a deposit or wait to see how support schemes such as the proposed Your First Home initiative develop,” she said.

The broader housing market data from HM Revenue & Customs showed that the number of homes sold in the UK in August decreased by 2 percent year-on-year, falling to 95,220 transactions. Meanwhile, rental costs in London remain significantly higher than the national average. The average monthly rent in the capital was recorded at £2,763, representing a 3.1 percent increase from the previous year. Nationally, average rents stood at £1,578 per month, up 2.4 percent over the same period.

These figures suggest that while the UK’s rental market has generally cooled, London’s market remains relatively buoyant due to ongoing affordability pressures and delayed homeownership opportunities for first-time buyers.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.