London rental supply shrank 5% in Q2 as the Renters' Rights Act drove landlords to sell up. Savills data show 30% of London homes sold in the year to March were former buy-to-lets. Rents hit a record as supply fell.
Alpha Score of 40 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
Landlords in London are selling up at the fastest pace in years. The trigger is the Renters' Rights Act, which took effect May 1 and ended no-fault evictions, replaced fixed-term leases with rolling contracts, and capped rent hikes. Supply is shrinking as a result.
In London, the number of rooms available to rent fell 5% in the second quarter from a year earlier, according to SpareRoom. That was the first year-on-year drop since 2022. “We think that’s down to landlords’ lack of confidence around the Renters’ Rights Act,” said Matt Hutchinson, a spokesperson for the platform.
Savills data show almost 700 former buy-to-let properties were listed for sale each day across the UK in the year to March. In London, 30% of homes put up for sale in that period were formerly rented out. The exodus has continued since then, estate agents said.
Rents rose to a record in the second quarter, Rightmove reported. Zoopla said new rental supply fell across most of England last month. The Royal Institution of Chartered Surveyors warned of “constrained” choice for tenants.
For landlords, the law is the latest blow after a decade of higher borrowing costs, increased taxes, reduced reliefs, and new energy-efficiency rules. Jeremy Leaf, a north London estate agent, called the RRA “the final straw for many landlords who are just too nervous about it.” Their chief worry is that the end of no-fault evictions, combined with a backlog in the court system, makes it harder to remove tenants who fall behind on rent or cause problems.
Investors expect no reprieve under new Prime Minister Andy Burnham. He backed calls for a freeze on private rents when he was mayor of Greater Manchester and has urged tougher action against landlords.
The risk is that fewer properties push rents higher and maintenance suffers. “The RRA is the final straw for many landlords who are just too nervous about it,” Leaf said.
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