Upsizing Uptick Signals Shifts in Tenant Demand: What London Landlords Need to Know

Why the Upsizing Trend Matters Now

Data from Reallymoving indicates that in early 2026, the proportion of homeowners upsizing their homes surged to its highest level since May 2021. This development contrasts sharply with 2023’s prominent downsizing trend and is chiefly attributed to improved mortgage affordability amid softer house prices. Specifically, mortgage usage in property transactions hit an eight-year peak, underscoring a renewed willingness among buyers to commit to larger, potentially more expensive properties.

For London landlords, this signals a subtle but important market pivot. When more owners opt to upsize, some tenants—particularly those currently renting smaller units—may transition to larger owned homes, potentially reducing rental demand in this segment. Conversely, landlords with larger properties or multiple-bedroom units might see steadier or even increased demand from tenants priced out of buying.

Practical Implications for Landlords

• Tenant Profile Shifts: Accidental landlords or those with single units in family-friendly areas could see a dip in demand from tenants who now find it financially viable to buy larger homes. In contrast, HMOs and portfolio landlords may notice stable demand from younger professionals or those prioritising location and flexibility.

• Rental Pricing and Marketing: With softer house prices reducing barriers to ownership for some, landlords should carefully review rental pricing strategies. Competitive pricing and targeted marketing towards renters who are less likely to buy—such as short-term tenants or those with credit constraints—will become increasingly important.

• Compliance and Mortgage Monitoring: The surge in mortgage activity suggests potential changes in tenant financial profiles. Landlords and letting agents should monitor lending criteria updates, ensuring tenant vetting practices remain robust and compliant with evolving affordability assessments.

Action Steps for Property Teams

1. Portfolio Review: Assess your property mix and tenant demographics to identify units at risk of reduced demand due to upsizing. This is particularly critical for single-unit landlords in suburban or commuter areas.

2. Adjust Marketing Strategies: Tailor advertising to highlight features attractive to renters unlikely to buy soon, such as flexible leases, inclusive utilities, or proximity to transport links.

3. Engage with Mortgage Brokers: Establish regular communication with mortgage advisers and brokers to gain insights into borrower behaviour and interest rate trends, helping anticipate tenant market movements.

4. Benchmark Locally: Since national figures may mask London’s unique market dynamics, track local house price indices and mortgage approvals to gauge the upsizing trend’s real impact on your catchment area.

5. Enhance Tenant Screening: Adapt referencing checks to reflect changing mortgage affordability conditions, ensuring tenants can sustain rent payments even if borrowing costs fluctuate.

Strategic Planning for Medium-Term Stability

With mortgage rates and house prices capable of shifting, landlords should integrate these trends into medium-term portfolio strategies. This includes:

• Scenario planning for tenant turnover rates linked to ownership affordability.
• Considering property upgrades or diversification into different unit sizes.
• Preparing for potential demand swings by maintaining flexible lease terms.

How Rentals & Sales Can Support You

At Rentals & Sales, we specialise in helping landlords navigate evolving market conditions. Our portfolio reviews can identify units vulnerable to shifting tenant demand. We also conduct compliance audits to ensure your tenant vetting aligns with current mortgage and affordability standards. Additionally, our pricing strategy services offer data-driven guidance tailored to your local market.

Contact us to schedule a consultation and safeguard your rental income against the upsizing trend’s ripple effects.

Compliance Notice: This article provides general guidance based on current market data and does not constitute financial or legal advice. Landlords should consult qualified professionals for advice specific to their circumstances.