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

London rents have fallen, as landlords struggle to sell properties ahead of the Renters' Rights Bill due to become law in early 2026. Data from Hamptons shows tenants in the capital are paying about £2,148 less a year, or £179 less a month, than in October 2024. In August 2025, the average monthly rent agreed on new lets in inner London was £2,752, a 5.8% year-on-year decline—the steepest since May 2021. Outer London also saw a drop, with new lets down 0.6% year-on-year to £2,311 a month. Across Britain, average rents have fallen 0.4% over the past 12 months.

Some landlords are attempting to offload properties before tighter rules take effect, but many are finding buyers scarce and are limiting rent rises to keep tenants. Aneisha Beveridge, head of research at Hamptons, said that after years of rapid rental growth the market is turning, with affordability stretched and demand softening forcing landlords to adjust to attract tenants. She noted there have been only six months over the last 14 years when rents fell nationally on an annual basis. Separately, Foxtons reported that London's tenant registrations are down about 7% versus 2024, and the stock of rental homes available year-to-date is up roughly 11% compared with the same period last year.

Marc von Grundherr, director of Benham & Reeves, said the market in London remains subdued for landlords looking to exit. Many who want to sell are finding offers weak, which has prompted some to revert to the rental market to preserve income until conditions improve and they can sell without eroding equity built up over time.

Sam Humphries, head of mergers and acquisitions at Dwelly, said the platform is advising landlords to delay selling if they can afford to wait. He noted an imbalance between a large pool of homes for sale and limited buyer demand is driving price cuts, longer transaction timelines and a higher risk of deals collapsing. The advice, according to Dwelly, is to wait out the period and maintain rental income until sales conditions improve, rather than rushing to sell in a softer market. Having built equity in their portfolios, landlords are cautioned that selling too soon could erode margins.

Industry observers say the Renters' Rights Bill, which tightens eviction powers and places new limits on rent increases, is shaping landlord behavior even before it takes effect. Experts had warned the policy could reduce housing supply and potentially lift rents, but current London data show a shift toward retaining existing properties and rental income as owners reassess strategy ahead of the policy rollout.