Share post:
Key Takeaways:
- The London property market remains resilient despite the regulatory changes affecting rental properties.
- Rental property success is driven by quality, pricing, and operations. It’s no longer reliant on high occupancy rates.
- Well-managed properties stay ahead of the competition even within similar property types and locations.
- Guest and tenant expectations are focused on “living quality” so investing in properly maintained and managed rental properties is key to increasing income.
- Professional property management is becoming essential to maximise rental income in London this year.
How to Maximise Rental Income in London: A Look at the Market
Learning how to maximise rental income in London means understanding the market as we enter into 2026. The year 2025 brought changes to the Private Rented Sector (PRS) that are causing landlords to rethink their letting strategies.
For one, the Renter’s Rights Act (RRA) is implementing additional restrictions on long-term rental management, with the first round of changes taking effect in 2026. Not only that, the Autumn Budget declared higher tax rates for rental income, which will take effect in April 2027.
This leaves landlords feeling unsure about the future of their rental business.
But what really is happening in the market?
Rental stock remains stable
London’s PRS is still going strong, or at the very least, stable. It still accounts for 19% to 20% (4.7 million) of households in England, which is a stable figure since 2013. Although you may be hearing news that landlords are starting to put their properties on the market, they’re still being bought by multi-property landlords and property investors. That means the rental property stock is relatively the same, and only ownership is shifting.
Market demand is still high
Did you know:
London attracted an estimated 21 million international visitors in 2024. – London.gov.uk
London is still one of the top destinations in the world. In 2024, approximately 21 million visitors travelled to the city. Occupancy rates for short-term rentals surpassed pre-pandemic levels, rising from 49.7% (2019) to 52.3% (2025), with the Central and Southern parts of London experiencing the sharpest growth.
For longer stays, tenant tenure has also increased, averaging 4 years.
What does this mean for 2026?
If you want to know how to maximise rental income in London, you need to:
- Focus on adapting and complying with the changes in PRS
- Find the real drivers of rental income in 2025
- Learn the letting strategies that work well with the current PRS landscape
- Use the right resources that will lead to long-term growth
What Drives Income in London’s Private Rented Sector
At City Relay, we consistently monitor and analyse booking patterns and guest feedback to maximise rental income in London.
In 2025, the strongest performing rental properties are those with clear strategies and consistent service execution.
We observed the following as we analysed the properties that performed well in 2025.
- Creating quality stays beats chasing higher occupancy rates. It’s about focusing on property maintenance, guest service, and overall management to ensure guests have a memorable stay.
- Higher nightly rates drive growth better than more bookings. Premium properties in Mayfair and Kensington achieved growth despite premium rental prices. It’s because guests look for high-value stays.
- Longer stays are better than constant turnovers. Guests who stay longer reduce operational strain by reducing cleaning frequency. It also leads to lower operational costs.
It was clear that guest preferences were shifting in 2025. They were looking for consistent property standards and valued professional communication. We noticed that well-maintained and thoughtfully equipped homes attracted quality bookings and longer stays.
The bottom line? Guests are not just looking for a place to sleep. They are looking for comfortable living spaces to make new memories, and they are willing to pay the right price just to get it.
As a landlord, you need to make this part of your strategy. Manage your rental property well so you can provide guests with quality property and the right price.
The Key to Maximise Rental Income in 2026
Given what worked in 2025, you can assume that execution matters in the current London rental market. Landlords have to focus on what they should do and make sure it’s implemented correctly and consistently.
For most landlords, implementation is the challenge.
This is where professional property management comes into play. City Relay, in particular, can help landlords strengthen the 4 pillars of their letting strategy this 2026.
Property quality
A well-maintained property can command higher rates and attract value-driven guests. Implement preventive maintenance and conduct regular assessments to ensure the property meets current standards.
Compliance with property standards will not just maintain the premium quality of your real estate asset. It can also protect your rental income and improve the guest experience.
City Relay has an in-house cleaning and maintenance team to preserve the premium quality of your property. We can respond quickly to housekeeping or maintenance requests to maintain a positive guest experience.
Location-led strategy
Market demand for rental properties varies by location. It also defines your target market.
City Relay manages hundreds of properties across London. We have deep insight into market demand and guest preferences per location. This allows us to create a location-specific strategy that is shaped by local demand patterns and regulatory constraints. From pricing to marketing strategies, we can ensure your property achieves optimised returns.
Smart pricing
Speaking of price, dynamic pricing maximises your rental yields. It adjusts to seasonality, market demand, and current conditions.
City Relay uses a smart proprietary platform to adjust and optimise rental fees. This is combined with more than a decade of property management expertise, enabling us to maximise rental yields for properties in London without increasing the risk.
Structured management
Working with a property management company like City Relay gives you access to structured systems that have been tested and improved over the years. From guest communication and property compliance to housekeeping and maintenance, your property will benefit from data-driven strategies that improve performance across these areas.
City Relay can also help you implement flexible letting so you can take advantage of the peak earning potential of shortlets and income stability of midlets and longlets. You’ll also benefit from their expertise to ensure guests have the best stay at your property.
With experts managing your property operations, you can enjoy rental yield without the hassle of day-to-day operations.
FAQs: How to Maximise Rental Income in London
Is rental income still worth pursuing in London this 2026?
Yes, renting your property in London is still a profitable venture. Rental demand remains strong, as London remains one of the top destinations for tourists and business travellers.
Although new regulatory changes are increasing landlords’ responsibilities, they can still improve their rental revenue by maintaining high-quality properties and providing excellent guest support.
Does the Renters’ Rights Act reduce profitability?
The Renters’ Rights Act increases the complexity of managing long-term rentals. However, the demand is still the same. While some landlords may be required to upgrade their properties to meet current standards, these can all be considered as long-term investments that will justify higher rental rates.
When managed well, properties can still increase profitability despite the additional compliance measures.
Is high occupancy still the main goal?
High occupancy is a goal, but it should not be the main goal because it does not always lead to high profitability. Like any business, what you should look for is sustainability.
Opt for smart pricing, quality service, and premium property aesthetics. This will lead to longer stays and even repeat bookings. These are the ones that drive long-term income growth.
Do small landlords have a chance to survive London’s current property market?
Yes, if you can operate professionally. Small landlords will feel the complexity and additional management costs more than multi-property owners. But with the help of property experts, a structured management process, and smart pricing strategies, even small landlords can thrive in London’s current property market.
Maximise Your Rental Income in London in 2026
The London rental market in 2026 will be marked by various changes that add complexity for landlords and property managers. However, this does not minimise the opportunities that will maximise your rental revenue.
When you look back on what worked in 2025, you’ll realise that discipline, expertise, quality, and long-term thinking lead to higher rental yields compared to high occupancy rates.
If you want to stay ahead this year, you need to stop chasing bookings. Instead, invest in:
- Property upgrades to improve quality
- Location-specific marketing strategies
- Smart pricing
- Professional property management
In the end, it’s not about doing more but knowing how to manage your property properly.
City Relay brings operational expertise, deep market insight, structured management, and innovative proptech solutions to help London landlords thrive in the current market.
If you’re in the midst of reviewing your 2026 strategy, we can help you get a clearer picture of your property’s income potential in London. Explore how smarter management can unlock your property’s potential. Whether you want to use short-term, mid-term, or long-term rental, we can help maximise rental income in London.
