Summer Lettings Market Comment 2026

Summer has certainly arrived in Prime Central London. As temperatures approach 40 degrees, the lettings market itself remains somewhat tepid. Activity is moving at a more measured pace than we might normally expect at this point in the year. After a softer spell at the turn of the year, conditions did improve through the spring, but the market remains selective. Across Knightsbridge, Marble Arch and the surrounding postcodes, there are still applicants in the market and good homes are letting, but tenants are taking their time, comparing options carefully and pushing back where pricing feels ambitious.

The latest figures point to a market that has stabilised rather than accelerated sharply. Average prime London rents rose by 2.7% in the year to May, the fastest annual growth since last August and a turn from the small falls recorded over the winter. Supply has also loosened, with new instructions up 28.7% year on year and the stock of available rental homes 23.0% higher than twelve months ago. That extra choice is being felt on the ground. Tenants have more to view than they did during the tightest part of the cycle, and while quality stock still attracts attention, it does not always move as quickly as the headline figures might suggest.

That is very much what we are seeing day to day. The best apartments continue to perform, particularly lateral flats with good light, porterage or security, and a specification that is ready to move into. However, the market is unforgiving of over-pricing. Homes launched at last year’s figure, or at a level that assumes continued rental growth, are sitting for longer. Accurately priced property is still attracting interest, but landlords should expect applicants to negotiate and should be prepared to respond to feedback quickly. In Prime Central London, the average gap between asking and achieved rent was around 5.0% in May, wider than two years ago, which underlines how important it is to set the right asking price from day one.

Demand also varies noticeably by price band. Lower and mid prime homes, broadly up to around £1,000 per week, remain the most resilient, supported by needs-driven demand. At the upper end, particularly at £5,000 per week and above, the market is more cautious. Tenants are benchmarking carefully, taking longer to decide and walking away from anything that feels tired, inflexible or overpriced. Knightsbridge continues to draw internationally mobile tenants, including families relocating to London on a temporary basis, but even at this level the best results are being achieved by homes that are properly prepared, sensibly priced and easy to move into.

The biggest change this summer is no longer on the horizon. The Renters’ Rights Act 2025 is now in force. Since 1st May, Section 21 has gone for new and existing private tenancies, Assured Shorthold Tenancies have become Assured Periodic Tenancies, and landlords and agents can no longer invite, encourage or accept offers above the advertised rent. The deadline for issuing the Government’s Information Sheet to existing tenants passed on 31 May, and we have served the required information across our managed and let-only tenancies.

Day to day, the practical changes are settling in. Rent increases now run through the annual Section 13 process, using the prescribed form with at least two months’ notice. Increases are limited to open market rent and may be challenged at the First-tier Tribunal. The old contractual rent review clause, and the tenancy renewal as a natural reset point, have gone with it.

Possession still exists where there is a genuine reason, including sale or a landlord or close family member moving into the property, but those grounds now carry a twelve-month protected period at the start of a tenancy and usually four months’ notice. For professionally managed landlords, this is mostly a question of process, paperwork and careful advice, but it does make forward planning more important.

Looking ahead, we expect the summer market to remain active but not scorching. The usual September demand from corporate and academic movers should help, although weaker early year sponsored study visa applications may temper some academic demand. Tenants have more choice than they did, and they are likely to remain price sensitive.

In short, summer 2026 finds the market stable, but cautious. Rental growth has returned at a sustainable pace, choice has improved for tenants, and presentation and pricing matter more than ever. For landlords, the essentials are clear: be realistic on price, present the property well and respond quickly to market feedback. Get those things right and property in Prime Central London will still let well, but the days of assuming strong interest at any price have passed. Plaza Estates is watching conditions closely and is on hand to advise clients through both the market and the new legislation with clear, practical guidance.

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