Landlords in Prime London Face Selling Challenge

Knight Frank reports that landlords trying to sell prime London property are facing downward pressure on prices. More are considering selling because of tougher regulation, including the prospect of stricter energy efficiency standards and the Renters’ Rights Bill, which could make it harder to regain possession and increase the risk of void periods.

Average prices in prime central London fell 2.5% in the year to June, the second-largest annual fall since March 2021, partly reflecting the political climate. In prime outer London, prices are being held back by high supply, including stock left over after the March stamp duty deadline and competition from other landlords selling up.

Gary Hall, head of lettings at Knight Frank, describes the lettings market as being in limbo, with uncertainty over when the Renters’ Rights Bill will take effect. He says landlords struggling to achieve their asking price are switching back and forth between selling and letting.

As more landlords try to sell, fewer homes are coming to the rental market. Knight Frank’s lettings instructions fell 8% in the year to June, and Rightmove data shows new prime London rental listings were 11% below the five-year average in the first half of the year.

Rents are responding to the tighter supply. In prime central London they rose 1.5% over the year and 1.7% over the first half, the largest six-month rise since January 2024. In prime outer London, annual growth was 1.5%, with 0.8% of that in the latest quarter. Knight Frank expects the direction of prime rents to depend unusually heavily on the sales market.

Source: Knight Frank Newcastle, original article (7 July 2025)