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14/7/25 8:13 pm
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London tenants are now paying an average of £2,148 less per year (£179 per month) than in October 2024, according to data from Hamptons. In inner London, the average rent on newly agreed tenancies in August 2025 was £2,752, a 5.8% year-on year decline.
Across Great Britain, average rents fell by 0.4% over the past 12 months, bringing the average monthly rent to £1,387. In outer London, new tenancies now average around £2,311 per month, down about 0.6% year-on year
What’s behind the decline?
Supply rising, demand cooling
Foxtons data points to a rising stock of available rental properties, easing the imbalance in favour of tenants. In June 2025, Foxtons reported that applicant registrations rose 21% month-on-month and supply was up 18% from May - the highest level in four years. At the same time, tenant registrations in London are reportedly down around 7% year on year, adding to the downward pressure.
Landlords attempting to exit before reform
Many landlords sought to sell properties ahead of the Renters’ Rights Bill, concerned about tighter controls on evictions and rent increases. In a softer sales market, however, some have struggled to achieve their target prices and are returning properties to the rental market, further adding to supply.
What this means for landlords - what to do now
Reassess your rent strategy
In a softening market, don’t assume tenants will accept steep increases. Even well-located but overpriced homes can sit vacant.
Selling? Adjust expectations
The window to “beat the reform” may be narrowing. If your listing is attracting limited interest, consider a price reduction or whether holding and letting is the smarter move.
Prepare for the Renters’ Rights Bill
While the legislation is not yet confirmed, it is likely to include:
• Stronger tenant protections (for example, revised eviction grounds)
• Limitations or conditions on rent increases
• Tighter rules around advance rent payments
Begin reviewing your tenancy agreements, your compliance framework, and potential legal exposure now.
Stress-test your portfolio
Model lower rent levels, longer void periods, and higher regulatory costs. Decide which assets to retain or dispose of and how much capital buffer you need.
Stay hyper local
London’s rental market is heterogeneous. Track supply, demand and pricing at the borough or postcode level, not just city-wide averages.
London’s rental market is shifting, and landlords must adapt. Those who act early, recalibrate expectations, and prepare for regulatory change are better placed to succeed.
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