London's rental affordability improved sharply over the past year, with the average pre‑tax salary needed to rent a typical home dropping 17% to £71,550. The average rent fell to £2,385 from £2,875 in June 2025, yet month‑on‑month rents jumped 3.4% in June.

The north‑west mirrored the trend, where a tenant now needs £33,300, down 17.5% year‑on‑year, while Scotland became less affordable. UK average rent sits at £1,500, leaving London 59% above the national level. The latest Rics survey shows a net 18% of agents reporting rising demand over three months, but an equal 18% noting fewer new landlord instructions. Agents forecast 2.5% rental growth over the next 12 months.

Regulatory pressure from the Renters’ Reform Act is prompting smaller landlords to exit, tightening supply further. Colin Townsend of John Goodwin in Malvern said many are "running scared" and leaving the market. With demand outpacing supply and policy‑driven exits accelerating, investors should expect continued upward rent pressure despite the annual affordability gains.