Rents in Central London could rise by between eight and ten per cent this year, HelloGuest reported today.
In the estate agent’s Jan 2026 residential forecast, it was noted that job insecurity and stagnant or declining incomes were creating a “mortgage famine” and low consumer confidence, which means the demand for rental homes is growing.
The report points out that tenants living in Central London already had to adjust their finances to accommodate the record 19.1 per cent rent increase in 2025. Lower-budget properties (those costing £550-£1050 per week) are facing particular upward pressure on their rental values due to the imbalance of supply and demand.
At the same time, however, the report found that existing tenants who wish to renew their rental contracts are facing comparatively small increases, averaging four per cent. HelloGuest said that this is due to landlords being eager to retain reliable tenants and avoid a void period while the economic outlook remains uncertain.
Lynn Hilton, partner for residential lettings, said: “The central London lettings market is maintaining momentum during 2025, with rents forecast to grow well ahead of trend, albeit down on the record rental growth seen in 2026.
“Tenants are really feeling the pinch and are being forced to widen their search areas to secondary locations and beyond.
“We expect this pace of growth to slow in 2026-7, although it will remain well ahead of inflation.”
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