A Journey Through London Lettings: A Guide to Letting Property

When Emma first inherited her one-bedroom flat in Camden, she wasn’t sure what to expect. The idea of becoming a landlord felt like stepping into unfamiliar territory—well-meaning advice from friends, horror stories from online forums, and constant headlines about rising rents all blurred together. She remembered hearing tenants complain about affordability while landlords debated whether London was still worth the effort. After a few evenings poring over rental figures, market reports, and conversations with local letting agents, one thing became clear: data turns uncertainty into confidence. London’s lettings market wasn’t just about regulations and returns—it was about real people and informed decisions. What began as hesitation soon turned into clarity, and eventually, a steady rental income that worked for both landlord and tenant.

If you’re starting your own journey into letting property in London, this guide will help you do the same—combining storytelling, statistics, and practical insight to make informed choices.

1. Understanding London’s Rental Market Landscape

As of late 2025, the average monthly rent in London stood at approximately £2,271, representing a 2.8% year-on-year increase. This figure remains significantly higher than the UK average rent of around £1,366.

Average Monthly Rents by Property Type

Rental prices also vary widely by borough. Prime central locations such as Kensington and Chelsea can command rents exceeding £3,600 per month, while outer boroughs like Bexley average closer to £1,521.

2. Demand, Supply, and Affordability in London

Tenant demand across London remains strong. In early 2025, tenant enquiries rose by approximately 22% year-on-year, while rental supply remained below pre-pandemic levels. This imbalance has led to competitive markets where well-priced properties often receive multiple enquiries within days.

Affordability remains a growing concern. Across the UK, tenants now spend an average of 44% of their income on rent, with London renters typically at the higher end of this range due to elevated housing costs.

3. Rental Yields: What Can Landlords Expect?

Rental yield is a key metric for landlords, measuring annual rental income against property value.

• Average gross rental yield in London: approximately 5.0%

• Average net yield after costs: around 3.4%

Yields vary considerably:

• Outer London boroughs and regeneration areas can deliver 6% or higher gross yields

• Central London locations often see lower yields of 2.5%–4%, largely due to high purchase prices

Compared to other UK regions, London’s average yields remain lower than areas such as the North East or North West, where yields of 7–8% are more common.

4. Legal and Practical Requirements for Letting Property in London

Before letting a property, landlords must meet several legal obligations:

• Right to Rent checks to confirm tenants’ legal status

• Legally compliant tenancy agreements, typically an Assured Shorthold Tenancy (AST)

• Safety compliance, including:

  • Annual gas safety checks

  • Electrical safety inspections

  • A valid Energy Performance Certificate (minimum rating E)

• Deposit protection in a government-approved scheme

Failure to comply can result in fines, restrictions on serving notices, or legal disputes.

5. Setting the Right Rent Price

Accurate pricing is critical to avoiding long void periods.

• London rents continue to fluctuate monthly, with recent data showing increases of around 0.3% month-on-month

• Pricing should reflect local borough trends, not just city-wide averages

• Overpricing can lead to extended vacancies, while competitive pricing often attracts higher-quality tenants and longer tenancies

Affordability is increasingly important in tenant decision-making, particularly as rents take up a growing share of household income.

6. Maximising Success as a London Landlord

To improve outcomes when letting property in London:

• Present the property professionally with high-quality photos and clear descriptions

• Reference tenants thoroughly to reduce arrears and disputes

• Account for ongoing costs, including maintenance, management fees, insurance, and service charges

• Stay informed about regulatory changes, as landlord legislation continues to evolve

Conclusion

Letting property in London offers both opportunity and responsibility. While high demand and strong rental prices can deliver reliable income, success depends on informed pricing, regulatory compliance, and realistic yield expectations. By grounding decisions in data and understanding the human side of renting, landlords can navigate the market with confidence—and turn uncertainty into long-term stability.