London rents outperform property values
The latest research by London lettings and estate agent, Benham and Reeves, has revealed that rental growth has outperformed house price growth across 26 of London’s 32 boroughs since the start of the year, with rents continuing to climb despite weaker property price performance across much of the capital.
Benham and Reeves analysed the average monthly rate of house price growth across each London borough (January to July 2026 – latest available), before comparing it to the average monthly rate of private rental growth over the same period.
London rents rising while house prices fall
Across London as a whole, average house prices have fallen by -0.10% per month since the start of the year. In contrast, average private rents have increased by 0.47% per month, highlighting the contrasting performance of the capital’s sales and lettings markets.
The research shows that 23 boroughs have recorded positive rental growth that has outperformed either falling or more modest house price growth.
Camden has seen the strongest average monthly rental growth at 1.16%, compared to a -0.13% monthly decline in house prices.
Islington has also recorded strong rental growth of 0.85% per month, despite house prices falling by -0.43%, while Brent and Hammersmith and Fulham have both seen rents rise by 0.67% per month, compared to house price declines of -0.18% and -0.20% respectively.
Rental market proves more resilient even where rents have fallen
A further three boroughs have seen average rents decline since the start of the year, but at a considerably slower rate than house prices.
Westminster has recorded the largest average monthly house price decline at -1.27%, while rents have fallen by just -0.01% per month.
In Kensington and Chelsea, house prices have declined by an average of -1.06% per month, compared to a rental reduction of just -0.05%.
Lambeth has also seen rents fall by only -0.01% per month, while house prices have declined by -0.27%.
Just six boroughs see house prices outperform rents
Just six London boroughs have seen stronger house price performance than rental growth, with all six recording positive average monthly house price increases.
Barking and Dagenham leads the way, with house prices increasing by an average of 0.82% per month, compared to rental growth of 0.15%.
Kingston upon Thames has recorded average monthly house price growth of 0.71%, despite rents falling by -0.13%, while Barnet has seen prices increase by 0.48%, compared to rental growth of 0.19%.
Ealing (0.32% versus 0.27%), Bexley (0.18% versus -0.05%) and Havering (0.04% versus 0.03%) complete the six boroughs where house price growth has outperformed the rental market.
Director of Benham and Reeves, Marc von Grundherr, commented: “London’s sales market has faced a challenging year, with house prices cooling across many boroughs as buyer demand has remained subdued.
In contrast, the rental market has largely gone from strength to strength, underpinned by the fundamentals of high tenant demand and limited available stock. This is particularly welcome news for London’s landlords, who have endured a turbulent year as they navigate the implementation of the Renters’ Rights Act and the additional pressures it brings.
While the legislation has undoubtedly created new challenges, it’s important not to lose sight of the strength of the underlying rental market. Rents continue to outperform house prices across the vast majority of London, demonstrating that demand for rental accommodation remains robust despite the wider challenges facing the property sector.
For landlords, property investment remains a worthwhile long-term proposition. Capital appreciation is only one part of the equation and, with rental income continuing to strengthen, buy-to-let remains an attractive investment option for those prepared to adapt to the changing landscape.”