In advance of the Renter’s Rights Act coming into force on 1 May, rents across prime London markets have predictably risen.
The new legislation covers a range of areas designed to protect tenants, including tighter rules around setting and collecting rent, the repossession process and restrictions on landlords selling their property.
As a result, a number of landlords sold or took back possession of their property before the new rules came into effect, while others have increased rents to reflect the new financial risks they face.
Average rental vales in prime outer London (POL) increased 3% in the year to April, which is the highest figure since June 2024, a period when annual growth was still coming down from the double-digit highs of the pandemic.
TIGHTENING SUPPLY
“Rental growth is being driven by a tightening supply backdrop,” said Mel Constantinou, head of lettings in south-west London and the Home Counties at Knight Frank.
“The Renters’ Rights Act is accelerating this, as landlords refine pricing strategies and, in some cases, exit the market further constraining supply, while tenants increasingly stay put as choice continues to narrow.”
Average rents in prime central London increased by 1.1% in the year to April. Supply has been less constrained in higher-value markets as more discretionary owners let out their property due to the current weakness in the sales market.
Either way, the number of lettings listings in PCL and POL in Q1 2026 was 15% below the five-year average, Rightmove data shows.
Underlining the imbalance between supply and demand, there were 5.9 new prospective tenants for every new rental listing in April, Knight Frank data shows. It was the highest figure since September 2022.
The Renters’ Rights Act is the latest in a series of obstacles that have faced landlords in recent years, which have included higher rates of stamp duty and the ending of tax breaks.
Average rents in PCL are 30% higher than a decade ago, while there has been an 25% increase in POL over the same period.
I discussed the Renters’ Rights Act as well as the likely impact of minimum energy efficiency standards on a recent episode of Housing Unpacked with Louisa Sedgwick, head of lending at buy-to-let specialist Paragon Bank.
Minimum Energy Efficiency Standard rules mean landlords will need to ensure their properties have an EPC C rating by 2030.
“This particular change in legislation I think is going to be bigger and potentially more demanding because I don’t believe we’ve got the infrastructure to support it,” said Sedgwick.
