Prime London rents have risen sharply ahead of the Renters' Rights Act coming into force on 1 May, with supply tightening and landlords repricing to reflect the financial risks of the new regime.
The legislation covers tenant protections across several areas, including tighter rules around setting and collecting rent, the repossession process, and restrictions on landlords selling their properties. In response, a number of landlords sold up or took back possession before the rules took effect, while others raised rents to account for the additional risk they now carry.
Average rental values in prime outer London rose 3% in the year to April, the highest figure since June 2024, when annual growth was still easing back from the double-digit peaks seen during the pandemic.
"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."
In prime central London, average rents rose 1.1% over the same period. Supply has been less constrained at the higher end of the market, where more discretionary owners have chosen to let rather than sell, given the current weakness in the sales market.
Across both markets, lettings listings in Q1 2026 were 15% below the five-year average, Rightmove data shows. Knight Frank figures paint an equally stark picture of the imbalance between supply and demand: there were 5.9 new prospective tenants for every new rental listing in April, the highest ratio since September 2022.
The Renters' Rights Act is the latest in a series of pressures to have landed on landlords in recent years, following higher stamp duty rates and the removal of tax breaks. Prime central London rents are now 30% higher than a decade ago, while prime outer London has seen a 25% increase over the same period.
Looking further ahead, minimum energy efficiency standard rules will require landlords to ensure their properties hold 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 Louisa Sedgwick, head of lending at buy-to-let specialist Paragon, speaking on a recent episode of the Housing Unpacked podcast.
