The Cost of London Office Space in 2026

London’s office market is shifting again, with rising rents, tighter supply and growing competition for the best-quality space. Many businesses are still refining their workplace strategies after years of hybrid experimentation, while upcoming energy regulations are reshaping the supply of buildings available to rent. Against this backdrop, many businesses are facing the challenge of understanding which spaces offer genuine long-term value and align with their needs both now and in the future.

This article breaks down what you can expect to pay for office space in London in 2026, why costs are rising, and how to plan your property strategy with confidence. Below, you can jump straight to any section that’s most relevant to your search.

London office market overview for 2026

The market is starting 2026 with a level of urgency we haven’t seen for several years. After a strong year of leasing activity in 2025, many occupiers are moving quickly to secure high‑quality space before supply tightens further. Prime rents have reached new highs across the capital, fuelled by the shortage of best‑in‑class buildings and the growing expectation that offices should support hybrid working, talent attraction and ESG goals. 

Prime rent in London

Prime rents have risen across London as businesses compete for the limited supply of high‑quality space. The clearest example is the West End, where demand for best‑in‑class buildings has pushed prime rents to around £182.50 per sq ft – a 14% year-on-year rise. Availability is particularly tight in areas like Mayfair and St James’s, and we’re seeing some ultra‑prime floors exceed these levels when they offer exceptional views, amenities or sustainability credentials.

The City core is experiencing a similar story, though at a different price point. Prime rents are holding at roughly £100 per sq ft, with premium tower floors achieving £115 or more. These buildings often benefit from larger, more flexible floorplates and strong transport links – a combination that continues to draw professional services and financial occupiers.

Southbank and Midtown remain competitive alternatives, with many refurbished buildings reaching close to £90 per sq ft. These areas appeal to occupiers looking for strong connectivity and a more creative or campus‑style environment, particularly where landlords have invested heavily in modern amenities and ESG performance.

Further east, in markets like Shoreditch, Farringdon and Old Street, refurbished space is performing almost as strongly as new builds. Headline rents in these locations typically sit between £90–£100 per sq ft for best‑in‑class space. The continued appeal of these submarkets reflects how workplace experience, connectivity and character now carry as much weight as brand‑new construction.

What Grade A vs Grade B space means in practice

Prime, Grade A space typically offers strong energy performance, modern amenities, generous natural light, and layouts that support hybrid working. These buildings help reduce running costs and support talent attraction. Secondary buildings (Grade B) may appear cheaper upfront but often require higher investment in fit out, upgrades or ongoing maintenance. In some cases, total occupancy cost ends up significantly higher than anticipated.

Leasing activity across London

Leasing activity across Central London remained steady through 2025, with demand concentrated almost entirely in high-quality buildings. Q3 2025 take-up reached 2.7 million sq ft, slightly below the long-term quarterly average but strong enough to push year-to-date volumes to approximately 9 million sq ft, around 15% higher than the same point in 2024.

Vacancy sits around 8–9%, but the distribution of available space tells the real story:

• ~70% of all take-up is in Grade A stock
• 80%+ of all vacant space is Grade B, where demand remains weak

This reinforces the two-speed market, with best-in-class buildings moving quickly and older stock continuing to struggle.

What’s driving office costs in 2026?

Several forces are shaping office costs in 2026, and together they’re creating a more complex environment for occupiers to navigate. The main pressure comes from the demand for high‑quality space far exceeding supply. Grade A buildings remain limited, and the best floors are often leased before completion as businesses prioritise hybrid‑ready, amenity‑rich environments that can genuinely draw people back into the office.

Landlords are also pushing ahead with upgrades to older buildings in order to stay competitive. Even without firm EPC deadlines in place, there’s a clear expectation from occupiers around energy performance and operational efficiency. These upgrades require significant investment, and as a result, we’re seeing these costs flow through into higher rents and service charges, particularly in submarkets where older stock dominates.

Taken together, these factors explain why costs continue to rise across prime submarkets. They also highlight the importance of assessing the full picture when planning your next move. A building that appears more expensive at first glance may offer better long‑term value once energy performance, fit out efficiency and employee experience are factored in.

In Q3 2025 alone, around 1 million sq ft completed, bringing year-to-date deliveries to just above 4 million sq ft. Yet almost two-thirds of that space was pre-let before completion, greatly limiting open-market options.

Refurbishments now represent the bulk of development activity. Landlords are repositioning older buildings to improve environmental performance, amenity provision and workplace experience. In Southbank alone, around half a million sq ft of new or refurbished space is due to complete by the end of 2026, with a further 900,000 sq ft in the pipeline to 2029.

New construction starts, however, have slowed considerably. Higher build costs, tighter funding conditions and longer planning processes have made speculative development more difficult. Multiple forecasts now predict a structural undersupply of Grade A space from the latter half of the decade.

For occupiers, this means the window of opportunity is narrowing. With overall vacancy around 8–9%, and Grade A availability substantially lower in core submarkets, the best buildings continue to let quickly.

At the same time, occupiers are refining their workplace strategies with greater clarity. Hybrid working has matured, and most organisations now have a clearer sense of how much space they need and what that space must enable. That shift is fuelling a sustained preference for energy-efficient, amenity-rich buildings that help people collaborate, focus and feel connected when they come into the office.

Demand is also being shaped by broader corporate priorities. ESG remains a central driver of leasing decisions, even without firm regulations in place, and occupiers are increasingly scrutinising building performance, operational efficiency and the long-term cost profile of each option. Refurbished buildings that can deliver modern performance in established locations are expected to remain highly competitive.

For tenants preparing for a move, renewal or consolidation, the key themes for 2026 are clarity, timing and preparation. Early engagement offers far more control over cost, choice and design outcomes, while detailed workplace analysis helps ensure that the space you select genuinely supports productivity and culture.

In a market where quality is scarce and competition is strong, the businesses that plan ahead and make decisions grounded in evidence will be best placed to secure a workplace that delivers long-term value.