London’s Economy in Numbers: Record Rents, Falling Prices and a Softer Jobs Market
London’s economy is sending mixed signals. The latest analysis from GLA Economics, the Mayor of London’s economics team, shows record rents and falling house prices at the same time as a cooling jobs market.
Rents at a record, prices falling
According to ONS data cited by GLA Economics, the average monthly private rent in London reached £2,317 in July 2026, the highest of any English region. Over the same period, average London house prices fell by 2.6% in the year to June 2026. The gap reflects a market where buying has become harder to finance while demand for rented homes remains strong.
A softer labour market
Payrolled employees in London fell by 6,600 between June and July 2026, a decrease of 0.8% on the year, according to the same release. Nationally, the UK economy grew for a seventh consecutive three-month period to June 2026, so London’s slowdown is notable.
Confidence and growth plans
The GLA’s State of London report, published in June 2026, found consumer confidence in London had been positive almost continuously since early 2024, reaching +15 in February 2026 against −19 for the UK as a whole. City Hall’s London Growth Plan sets a target of restoring productivity growth to around 2% a year over the next decade, which it estimates would make the London economy £107 billion larger by 2035.
What it means
- Landlords and investors: strong rental demand continues to support yields, but tax changes for landlords from April 2027 will affect returns — see our Autumn Budget guide.
- Buyers: price falls improve affordability at the margin, but borrowing costs remain the constraint — see our Bank of England analysis.
- Businesses: a cooler jobs market may ease hiring pressure but signals weaker demand in some sectors.
Frequently asked questions
What is the average rent in London?
The average monthly private rent in London reached £2,317 in July 2026, according to ONS data cited by GLA Economics.
Are London house prices falling?
Average London house prices fell by 2.6% in the year to June 2026.
What is the London Growth Plan?
City Hall’s plan to restore London’s productivity growth to around 2% a year, which it estimates would make the economy £107 billion larger by 2035.
Sources
This article is general information, not financial, tax or investment advice. Figures are taken from the sources listed and were correct at the time of publication.
