Post navigation
NextMajor property firm’s accountants face FRC investigation after £165m accounting error Print
Jeremy Leaf
With rental supply remaining tight across the capital, London’s buy-to-let market is presenting renewed opportunities for investors, with rents and yields rising in several parts of the city.
That is according to Jeremy Leaf, a north London estate agent and former residential chairman of the Royal Institution of Chartered Surveyors.
He said: “Conditions for letting property are favourable at present given the level of stock being sold and demand remaining strong in most areas, so many longer-term landlords are taking advantage.”
However, Leaf added that many landlords are choosing to leave the market rather than benefit from current conditions, citing tighter regulation and higher taxes – a trend reflected in the latest Savills report, which found that the UK’s private rented sector recorded its largest value decline this century in 2025, falling by £48bn.
Leaf explained: “The reason why many are leaving the sector is the looming Renters’ Rights Act which is due to become law on 1 May. Landlords will then find regaining possession is likely to prove more difficult – they will have to wait over a year if they want to re-let to prevent back-door evictions, they won’t be able to increase the rent more than once a year and then subject to review, as well as stricter penalties, to name but a few changes.“As a result, an increasing proportion of landlords are not renewing agreements and trying to sell despite the attraction of higher rents and yields. We’re finding many of those staying put are increasing rents to market levels while they can but ensuring references, guarantees and insurance are up to speed as well as instructing qualified agents to reduce the risk of problems arising. Even those with tenants who have proved reliable in the past appreciate circumstances change and nothing stays the same.”
Tom Bill
While the UK market is showing signs of greater balance, as reflected in today’s Zoopla report – which indicates that rents have become more affordable, with annual growth slowing to 1.9% from 2.8% and the average rent now at £1,319 a month – supply remains constrained in parts of London.
Tom Bill, head of UK residential research at Knight Frank, commented: “Some landlords have already sold due to extra red tape and taxes while others are waiting to see how disruptive the Renters Rights Act is when it comes into force in May. With tougher green regulations also coming down the line, further upwards pressure on rents cannot be ruled out.”
Harry Watts, lettings director at Douglas & Gordon, points out that While the market in central and south London has become more balanced compared with the 2022–23 peak, applicant registrations are still up 18% so far this year versus the same period last year, which points to continued underlying demand for well located, good quality homes.
“At the same time, as we move closer to the Renters Reform Act, we’re seeing more tenants being asked to move at points in the year when they would not typically expect it,” he said. “In many cases, this appears linked to landlords reassessing their position and, in some instances, choosing to sell, which is becoming more prevalent.”
“And even where rental growth is cooling, there is a clear affordability ceiling. Over the past couple of years, tenant incomes have struggled to keep pace with pricing, so correctly priced homes let well, while anything ambitious is taking longer and facing sharper negotiation.”
Gary Howorth, regional sales director at Chestertons, has observed a noticeable increase in first-time buyers purchasing property in London in recent months, which he says has temporarily reduced demand for rental properties.
He added: “We will likely see the market turn and [rental] demand go up again as we enter spring; a particularly busy time for tenants looking to move.”
UK private rented sector shrinks by £48bn as buy-to-let landlords flee the market
Back to Homepage