RICS Market Survey Signals Stall: What London Landlords Must Do Now

A Market Pause with Far-Reaching Impact

The Royal Institution of Chartered Surveyors (RICS) Market Survey has sounded an alarm for private landlords across the UK, particularly in London. Landlord instructions to letting agents have dropped sharply to their lowest since April 2020, alongside a flattening in tenant demand and a stall in buyer and vendor activity overall. This downturn is driven largely by uncertainty surrounding the forthcoming Budget and the potential introduction of the Renters’ Rights Act.

For London landlords—especially those with higher-end properties or HMOs—this signals a market where caution is the watchword. The survey forecasts subdued activity through 2025, with optimism for recovery only emerging in 2026 once government policy becomes clearer.

Why This Matters: Regulatory and Financial Crosswinds

The Renters’ Rights Act is expected to introduce new tenant protections that could reshape lettings operations and compliance requirements. While the exact details remain forthcoming, landlords should anticipate changes that may affect tenancy agreements, eviction processes, and property standards.

Simultaneously, the upcoming Budget—expected in late 2025—may revise key taxes impacting landlords, including stamp duty, capital gains, and inheritance tax. These fiscal adjustments add another layer of complexity, influencing profitability and investment decisions.

Different Landlords, Different Challenges

• Single-Unit Landlords: With fewer tenant enquiries, pricing your property competitively without eroding returns is critical. Avoid hasty rent increases or aggressive marketing until there is more clarity.

• HMO Landlords: Regulatory scrutiny often intensifies with HMOs. The Renters’ Rights Act may bring new compliance demands. Prioritise legal advice and property condition audits now to avoid costly penalties later.

• Portfolio Landlords: Larger portfolios face amplified risk from stalled lettings and tax changes. Assess liquidity carefully, considering whether to hold, sell, or restructure assets in anticipation of market shifts.

• Accidental Landlords: If your property was not originally intended for lettings, now is the time to review your financial resilience and compliance frameworks, as uncertainty could pressure cash flow.

Practical Steps for Immediate Action

1. Review Tenant Protection Preparations: Consult your legal advisers to understand emerging Renters’ Rights Act provisions and begin updating tenancy documents and policies accordingly.

2. Communicate with Letting Agents: Engage your agents in transparent conversations about pricing strategies and marketing plans. Encourage cautious, data-led approaches rather than reactive listing.

3. Financial Resilience Planning: Conduct a stress test of your rental income against potential tax hikes and vacancy periods. Build or preserve cash reserves to weather slower lettings.

4. Monitor Government Updates: Mark late 2025 in your calendar for the Budget announcement and set up alerts for policy changes affecting property taxation and landlord rights.

5. Compliance Audits: Schedule regular compliance reviews with your property managers or compliance teams to ensure adherence to evolving regulations and avoid enforcement actions.

Looking Ahead with Rentals & Sales

Navigating this challenging period requires proactive management and informed decision-making. Rentals & Sales offers tailored portfolio reviews and compliance audits designed to pinpoint risks and opportunities in your holdings. Our specialist teams can guide you through pricing strategy adjustments and regulatory updates, helping maintain tenant demand and income stability.

Compliance Disclaimer

This article provides general guidance and does not constitute legal or financial advice. Landlords should consult qualified professionals for advice specific to their circumstances and monitor official government and regulatory announcements.