London landlords look to sell before legislation hits

Uncertainty over legislation is prompting more London landlords to leave the market, claims an estate agent.

Knight Frank reports the Renters’ Rights Bill, stricter EPC rules and rumours of charging national insurance on rental income have left landlords looking to exit the market.

The estate agents also warn the rumoured proposal of charging national insurance on rental income will do nothing to help landlords or tenants.

Some landlords have been spooked and are looking to sell

David Mumby, head of prime central London lettings at Knight Frank, said uncertainty is prompting some landlords to put their properties up for sale.

He said: “Some landlords have been spooked and are looking to sell.

“If the muted sales market means they can’t achieve their asking price, a number will come back to lettings. And that could accelerate quite quickly if November’s Budget puts further pressure on the sales market.”

Knight Frank’s data show that in the year to August, the number of new rental properties entering the London market was 8% lower than the previous 12 months. By contrast, the supply of homes for sale rose by 10% over the same period.

Despite fewer rental listings, rents are still climbing. In prime outer London, average rents grew 2% in the year to August, the fastest annual increase since October 2024. Over the most recent six months alone, rents rose by 1.8%, the strongest half-year rise in 18 months.

If you tax an activity, you get less of it

Tom Bill, the head of UK residential research at Knight Frank, warns the rumoured proposal of national insurance on rental income will damage supply.

He said: “Those drawing up the Budget and reportedly considering the National Insurance rise will hopefully remember the simple rule that if you tax an activity, you get less of it. If they don’t, it certainly won’t make life easier for tenants.”