https://www.thelandsite.co.uk/files/articles/376151d6605c11e98dac024b03131eda/london-housing.jpg 483

Landlords in Prime London Face Selling Challenge

Posted by Knight Frank Newcastle on 7th July 2025 -

title

Landlords selling a prime London property face the challenge of downwards pressure on prices.

More are exploring a sale due to the tougher regulatory environment. In addition to the prospect of stricter energy efficiency rules, the forthcoming Renters' Rights Bill could make it more onerous to regain possession of a property and raises the risk of void periods.

However, achieving their asking price is not guaranteed.

Average prices in prime central London (PCL) fell 2.5% in the year to June, which was the second largest fall since March 2021, in part due to the political climate, as we explore here.

Meanwhile, prices in the more domestic and needs-driven market of prime outer London (POL) are under pressure due to higher levels of supply. As well as an overhang of stock following March’s stamp duty cliff edge, there is competition from other landlords who are also trying to sell.

The result is that some owners are caught in the no man’s land between selling and renting out their property.

“There is a sense of limbo at the moment in the lettings market. We have the Renters' Rights Bill on the horizon but there is speculation that it could be delayed,” said Gary Hall, head of lettings at Knight Frank.

“Those landlords that are trying to sell are finding they are not necessarily able to do so quickly because there is so much stock around. A number of them are therefore bouncing between lettings and sales and back again after failing to get their asking price.”

Less to Let

As more landlords attempt to sell, the result is fewer new properties available to let.

The number of lettings instructions from landlords fell 8% in the year to June compared to the previous 12 months, Knight Frank data shows.

It tallies with data from Rightmove, which shows the number of new rental listings in prime central and outer London was 11% below the five-year average (excluding 2020) in the first six months of the year.

There are reports that the Renters Rights Bill faces delays and may not come into force this year. After last week in Parliament, it certainly can’t be the most pressing issue facing the government.

 
Average rents in PCL increased 1.5% in the year to June but rose 1.7% over the first half of the year. It was the biggest increase over a six-month period since January 2024, a period when rental value growth was cooling after the market experienced supply shortages during the tail end of the pandemic – see chart.

It demonstrates how rents have started to climb higher as stock levels fall. In POL, annual growth of 1.5% was driven by an increase of 0.8% over the last quarter. The three-month growth figure was last surpassed November in 2023.

What happens next to prime London rents depends more than normal on the performance of the sales market.


Jill Farmer

Knight Frank Newcastle is recognised as one of the most progressive and dynamic commercial property estate agent in the region and North East.

Link to Knight Frank Newcastle business profile

22nd July 2025
Country Market Stirs into Life as Asking Prices Fall
The second quarter of 2025 was the most favourable market for buyers in the Country for seven years.
Read more
22nd July 2025
Colliers Reports Further Growth in UK Prime Industrial Rents, but Momentum Begins to Ease
According to the latest Rents Map research from Colliers, average prime headline industrial rents continued to rise in the first half of 2025, though early indicators point to a softening in growth rates.
Read more
17th July 2025
South West LPAs Five Year Housing Land Supply Update
December 2024, the revised National Planning Policy Framework (NPPF) reinstated the mandatory requirement for all Local Planning Authorities (LPAs) to demonstrate a five year supply of deliverable housing land
Read more