Data: Rents fall in London as landlords fail to sell

London tenants are seeing rents fall, data shows, as landlords fail to offload their properties before renters are handed new rights. Renters in the capital are paying £2,148 less a year or £179 less a month than they were in October 2024, according to estate agent Hamptons.

The average monthly rent agreed on new lets in inner London in August 2025 was £2,752, which equates to a 5.8 per cent fall year-on-year. This was the largest decline since May 2021. Across Britain as a whole, average rents have fallen 0.4 per cent over the past 12 months. In outer London, new lets agreed are down by a more acute 0.6 per cent year-on-year, with properties being agreed for £2,311 a month on average.

Some landlords are reported to be trying to sell properties ahead of the upcoming Renters’ Rights Bill, which is set to become law in early 2026, as this will put tighter restrictions on their ability to evict tenants and raise rents. Experts had warned that this would lead to a dearth of properties, which could raise rents. However, now it appears many are struggling to sell, and are having to limit rent rises in order to keep their tenants. Aneisha Beveridge, head of research at Hamptons, said: ‘After several years of rapid rental growth, the tide is finally turning.

‘With affordability stretched and demand softening, landlords are having to adjust to attract tenants.’ She added that there have only been six months over the last 14 years when rents have fallen nationally on an annual basis. Separate figures suggest the number of tenants seeking homes in London is slowing down. Tenant registrations in London are down 7 per cent compared to 2024, according to Foxtons.

Meanwhile, it said that in the year to date, the number of rental homes available is up 11 per cent compared with the same period in 2024. This might mean landlords have to offer more competitive rents to secure tenants, which tallies with Foxtons data showing average rents fell by 5 per cent in August.

Marc von Grundherr, director of estate agent Benham and Reeves, claims landlords wanting to exit the market are finding they are unable to sell. He said: ‘The housing market is currently a little subdued, particularly in London. ‘M any landlords who are keen to exit are dipping a toe into the sales market only to find the water too cold. ‘When they struggle to sell or fail to receive sensible offers, they are reverting to the rental market.

‘This allows them to maintain income until conditions improve and they can sell without seriously denting the equity they’ve worked hard to build over the years.’ Sam Humphries, head of mergers and acquisitions at Dwelly, a technology platform for letting agents, says it is advising landlords to avoid selling in the current market if they can afford to.

Humphries said: ‘The imbalance between the abundance of homes for sale and limited buyer demand is leading to price cuts, longer transaction timelines and a higher risk of sales collapsing. ‘Landlords can either accept a lower price now in the hope of completing before the Renters’ Rights Bill comes into effect, or wait it out, adapt to the legislative changes, and continue benefiting from consistent rental income until sales conditions improve.

‘Our advice is firmly the latter. Having worked hard to build equity within their portfolios, it would be a shame for landlords to see this margin eroded by rushing to sell in a more subdued sales environment.’