London rents fall as landlords fail to sell ahead of Renters' Rights Bill

London rents are easing as landlords delay selling properties ahead of the Renters' Rights Bill, which tightens evictions and rent increases in early 2026. New data from Hamptons shows London tenants are paying about £2,148 less a year than a year earlier, or roughly £179 less per month, compared with October 2024. In inner London, the average monthly rent agreed on new lets in August 2025 was £2,752, a 5.8% year-on-year decline—the largest annual drop since May 2021. Across Britain, rents have fallen 0.4% year on year, and in outer London, new lets are down 0.6% to an average of £2,311 per month.

Analysts say that some landlords are trying to exit the market by selling before the new rules take effect, but the sales market has cooled, forcing many to keep renting to protect income. Aneisha Beveridge, head of research at Hamptons, said the tide is turning after years of rapid rent growth, adding that only six months in 14 years have seen rents fall nationally on an annual basis. Separately, Foxtons reported softer demand in London, with tenant registrations down 7% year to date versus 2024 and rental homes available up 11%, which aligns with a 5% average rent decline in August.

Market observers say landlords who want to exit are finding they cannot easily sell and are reverting to the rental market to protect income until conditions improve. Marc von Grundherr, director of estate agent Benham and Reeves, said: 'The housing market is currently a little subdued, particularly in London. Many landlords who are keen to exit are dipping a toe into the sales market only to find the water too cold. When they struggle to sell or fail to receive sensible offers, they are reverting to the rental market. This allows them to maintain income until conditions improve and they can sell without seriously denting the equity they've built over the years.'

Sam Humphries, head of mergers and acquisitions at Dwelly, a technology platform for letting agents, said Dwelly is advising landlords to avoid selling in the current market if they can afford to. He said: 'The imbalance between the abundance of homes for sale and limited buyer demand is leading to price cuts, longer transaction timelines and a higher risk of sales collapsing. Landlords can either accept a lower price now in the hope of completing before the Renters' Rights Bill comes into effect, or wait it out, adapt to the legislative changes, and continue benefiting from consistent rental income until sales conditions improve. Our advice is firmly the latter. Having worked hard to build equity within their portfolios, it would be a shame for landlords to see this margin eroded by rushing to sell in a more subdued sales environment.'