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

London’s rental market is cooling as landlords struggle to offload properties before the Renters' Rights Bill becomes law next year, according to data from Hamptons. In inner London, the average rent agreed on new lets in August 2025 was 2,752 pounds a month, a 5.8% decline year on year. Tenants in the capital are paying about 2,148 pounds less per year than they were in October 2024, the firm said. Across Britain, average rents have fallen 0.4% over the past 12 months. In outer London, new lets are down 0.6% year on year, with properties averaging 2,311 pounds a month. Some landlords are reported to be trying to sell properties ahead of the Renters' Rights Bill, which is set to become law in early 2026 and will tighten restrictions on evictions and rent rises. While early warnings suggested a squeeze on supply could push rents higher, the latest data show many owners who cannot secure sensible sale offers are instead limiting rent rises to keep their existing tenants.

London rents have started to ease after several years of rapid growth. Aneisha Beveridge, head of research at Hamptons, said the market is turning as affordability pressures bite and demand softens, forcing landlords to adjust to attract tenants. She noted that there have only been six months in the last 14 years when rents fell nationally on an annual basis, underscoring how unusual this moment is. Foxtons’ data suggest the pace of demand in the capital is moderating as well: tenant registrations in London are down 7% versus 2024, while the number of available rental homes year to date is up 11% on the year. In August, Foxtons reported that average rents fell about 5% in London.

The shift is feeding into sellers’ behavior. Marc von Grundherr, director at Benham and Reeves, said the London housing market remains subdued. Some landlords keen to exit are finding it hard to secure offers that make sense and are reverting to renting to protect income until conditions improve. He added that many owners are testing the water in the sales market but retreat to rental when offers are not satisfactory, preserving equity until the market improves.

Sam Humphries, head of mergers and acquisitions at Dwelly, a technology platform for letting agents, notes that the imbalance between abundant homes for sale and subdued buyer demand is driving price cuts, longer transaction timelines, and a higher risk of deals collapsing. His advice to landlords who can afford to wait is to avoid selling now and instead continue to rent, preserving earnings until sales conditions recover.

The broader context shows the rent shift is occurring alongside changing demand for rental housing. Separate data indicate London tenant registrations are slowing, while the stock of rental homes available in the city has risen this year. The Renters' Rights Bill, expected to take effect early next year, will bring tighter controls on evictions and rent increases, potentially reshaping the city’s rental landscape over the medium term. For now, landlords appear to be recalibrating, with many opting to retain assets and generate income from rents rather than pursue rapid sales in a market that remains uncertain.

As the market adjusts, renters may find more competitive deals in parts of London, though the full impact of the Renters' Rights Bill remains to be seen. In the near term, investors appear to be recalibrating strategies, with some choosing to hold assets and convert them into longer-term rentals rather than rushing to sell in a softer market.