London rents reach £2,272 in September 2026 as affordability hits 38% of income

Greater London’s average monthly rent reached £2,272 in September 2026, up 1.5% on August and the highest regional figure in the UK, according to the latest HomeLet Rental Index. HomeLet also says tenants in London are now spending 38% of income on rent, compared with a UK average of 32.1%. For landlords, that matters less as a headline than as a warning sign on affordability and arrears risk.

There is no new legislation or deadline in this update. The compliance risk is operational: landlords and agents still need to follow the existing rules on rent increases, tenant referencing, deposit protection, EPCs, gas safety, electrical safety and possession notices. If rents are pushed to the top of the market without a proper affordability check, the chance of early arrears and tenancy failure rises.

Tighten affordability checks, not just asking rents

A basic salary multiple is often too blunt in higher-cost parts of London. A tenant may pass a gross-income ratio but still struggle once debt repayments, childcare, commuting costs, council tax and utilities are taken into account. That is particularly relevant in boroughs where travel and childcare costs can materially affect monthly surplus.

A stronger referencing process should record:

• Net income, not just annual salary
• Regular credit commitments and other debt repayments
• Whether income relies on bonuses, overtime or benefits
• How affordability was assessed and any assumptions made

If an external referencing firm is used, ask for its methodology in writing. A file showing only a pass/fail outcome with no reasoning may be difficult to rely on if the tenancy later breaks down or an applicant challenges the decision-making process.

Check the correct route for rent increases

Rising market rents do not remove the need to follow the tenancy agreement and the law. In England, increasing the rent during a tenancy will usually depend on either:

• a valid rent review clause in the tenancy agreement, or
• a Section 13 notice where the tenancy is periodic and no valid review clause applies.

Before serving any notice, check the tenancy terms carefully. Poorly drafted rent review clauses are common and may be unclear on timing or method. An invalid increase can be challenged and may damage the landlord-tenant relationship unnecessarily.

For existing tenants, it is often sensible to begin with a written proposal setting out the proposed new rent, the start date and the local market evidence. The HomeLet London average of £2,272 is useful context, but it is not evidence for every property type or borough. Any increase should be supported by comparable local lettings rather than a single regional average.

Treat arrears prevention as an early-stage process

Where tenants are already spending 38% of income on rent, even a relatively small rise in household bills can lead to missed payments. That makes early intervention important.

A practical arrears process should include:

• contact within 24 to 72 hours of a missed payment
• written confirmation of the amount outstanding
• a prompt check on whether the issue is temporary or ongoing
• a documented repayment plan where appropriate
• a full paper trail of emails, calls and payment proposals

Good records will not solve every case, but they can reduce disputes and support later enforcement if possession action becomes necessary.

Review cashflow assumptions across the portfolio

Higher rents may improve headline yield, but they do not remove refinancing risk or the cost of a failed let. Landlords with borrowing due for review in the next 12 to 18 months should stress-test cashflow using realistic assumptions on voids, arrears and product conditions rather than relying on current asking rents alone.

What to do now

1. Within 14 days, update referencing forms and decision logs to record net income, debt and essential outgoings.
2. Before any rent increase is issued, confirm whether the tenancy agreement allows a review or whether Section 13 is the correct route.
3. Before month-end, review tenancies in arrears or due for renewal and decide which need early contact, a repayment plan or stronger local rent evidence.

Landlords still need to keep the legal basics in order, including deposit protection within 30 days, current gas safety records, a valid EICR where required, the correct EPC, and compliance with smoke and carbon monoxide alarm rules.

This article is general information, not legal or tax advice.