The Renters’ Rights Act, coming into force on 1 May, is expected to place upward pressure on rents across prime London as landlords adjust to increased regulatory risk. Knight Frank has slightly revised its forecasts but still anticipates stronger rental growth this year, supported by constrained supply and shifting demand patterns. The changes arrive alongside broader market dynamics, including higher borrowing costs and evolving tenant behaviour.
- The legislation increases risks on selling property, setting rents, and securing rental income
- Knight Frank forecasts 3.5% rental growth across prime London this year
- Landlord exits are expected to reduce supply and push rents higher
- Rental demand remains strong due to sales market affordability pressures
- Some demand is coming from tenants returning from the Middle East
- Rental properties must meet EPC C standards by 2030
Original article source: Property Reporter
What we’re seeing here is a familiar pattern in the London rental market – regulation tightens, risk increases, and pricing adjusts accordingly.
The Renters’ Rights Act reshapes the risk-reward balance for landlords. Restrictions around possession, rent-setting, and income certainty make the asset class less flexible. In response, landlords who remain in the market will naturally price in that additional risk. Others will simply exit, which reduces available stock.
That supply contraction is where the real pressure builds.
Even with only modest headline increases, the underlying direction is clear – prime London rental values are being supported by structural constraints. This tends to produce a more stable, durable form of growth.
At the same time, demand is holding firm. Higher borrowing costs continue to keep some buyers in the rental market longer than planned, while geopolitical uncertainty is encouraging flexibility among more mobile tenants. The added layer of short-term demand from those returning from the Middle East only intensifies that trend.
There’s also a longer-term consideration developing in parallel. The move towards stricter EPC requirements by 2030 introduces another decision point for landlords. Some will invest and upgrade, but others won’t. Either way, it contributes to a gradual filtering of stock, with compliant, well-prepared properties becoming more valuable over time.
Well-positioned landlords – those with quality assets and a long-term view – are likely to benefit from tighter supply, consistent demand, and a clearer competitive landscape.
