London rental demand may rise on closer UK-EU ties — why landlords should tighten deposit, licensing and right-to-rent checks now

LegalforLandlords’ warning is not about a new regulation. It is about market pressure. Reported figures cited by Landlord Today say rental competition rose from 23.6% across Q2 to Q4 2019 to 25.5% across Q1 to Q3 2026, while baseline rental listings fell 22.9%, from 160,517 to 123,797. If closer UK-EU ties were to increase European migration, that could tighten an already undersupplied private rented sector further. For London landlords and letting teams, the immediate task is not to second-guess policy. It is to make sure stronger demand does not turn into avoidable compliance failures.

What is actually confirmed

At this stage, the confirmed point is narrow. Landlord Today reports LegalforLandlords’ analysis and its call for government action to keep buy-to-let investors in the sector. There is no new Bill, no consultation attached to this report and no statutory deadline created by it.

That distinction matters. Landlords do not need to rewrite tenancy documents because of this article alone. They should, however, assume that if applicant volumes rise while stock stays tight, complaints, delays and enforcement risks become harder to manage.

Why London landlords are more exposed

London tends to feel demand spikes faster than most regions, often with more acute affordability pressure. In many boroughs, a well-priced re-let near a station can attract dozens of enquiries within days. That can tempt agents and self-managing landlords to cut corners on referencing, right-to-rent checks, inventories or deposit paperwork.

Those are not harmless admin slips. Missing the deadline to protect a tenancy deposit or serve the prescribed information can damage a landlord’s position if possession is needed later. A rushed right-to-rent process can expose a landlord or agent to a civil penalty. Missing records for gas safety, electrical safety or licensing can become expensive very quickly if a tenant complains to the council.

The legal duties have not changed

The core compliance rules remain the same:

• Gas safety checks must be carried out on time where required.
• EICRs must be in date where the regulations apply.
• Tenancy deposits must be protected correctly and the required information served within the legal deadline.
• Right-to-rent checks must be completed in line with Home Office guidance.
• EPC and MEES rules still apply, with the general minimum at EPC E unless a valid exemption has been registered.
• Licensing for HMOs and selective licensing still depends on the borough, property type and occupancy, rather than any single London-wide scheme.

If a landlord or agent expects lettings activity to speed up, these are the controls worth stress-testing first.

Where process failure usually happens

For portfolio landlords and agencies, the main danger is not lack of demand but process breakdown under time pressure. Even if a property could be let within 48 hours, the compliance file still needs to be complete.

A sensible pre-marketing sequence is:

1. confirm whether a licence is required and whether one is already in place;
2. check gas, electrical and EPC records;
3. approve the property for marketing only once the compliance file is complete;
4. carry out referencing and affordability checks;
5. complete right-to-rent checks correctly;
6. issue the tenancy agreement;
7. protect any deposit and serve the prescribed information on time; and
8. keep a proper inventory and check-in record.

That discipline matters especially in boroughs with a history of active enforcement, including Newham, Waltham Forest, Brent and Haringey.

Rent-setting and discrimination risk

Higher demand does not give landlords a free hand to improvise on rent increases. The legal route depends on whether the landlord is agreeing a rent for a new tenancy, renewing a fixed term or increasing rent during a periodic tenancy using the correct process.

Applicant handling also becomes riskier when enquiry levels rise. Informal filtering can easily cross into discrimination or produce a poor paper trail. Instructions such as “working professionals only”, blanket refusals of families, or assumptions about non-UK nationals can create legal and reputational problems depending on how they are applied.

A safer approach is to:

• set clear affordability criteria in writing;
• apply those criteria consistently to all applicants;
• avoid blanket assumptions; and
• keep notes showing why an applicant was accepted or declined.

Do not budget for policy support that does not exist

LegalforLandlords is arguing for incentives to keep investors in the private rented sector. That is a policy position, not a confirmed government measure. Nothing in the report establishes tax changes, grant funding, licensing reform or mortgage support.

Landlords should not budget on the assumption that relief is coming. A more realistic approach is to model two scenarios over the next six to 12 months:

• stronger tenant demand with no policy help; and
• stronger demand combined with higher operating costs, such as repairs, void turnaround pressure or local compliance spend.

In London, where labour and contractor costs are already relatively high, even a modest increase in re-let volume can put maintenance response times under strain.

Retention may be cheaper than chasing the next re-let

In a supply squeeze, keeping a reliable tenant for another 12 months is often cheaper than pushing immediately for a top-of-market re-let after cleaning, repairs, compliance refreshes and agent fees.

For single-property landlords, that means responding to repairs promptly and reviewing renewal dates early. For larger portfolios, it means tracking churn by borough and identifying whether complaints, disrepair or slow contractor attendance are driving avoidable exits.

Three actions to take now

1. Within 14 days: audit every live and upcoming let for gas safety, EICR, EPC, deposit protection and licensing status, and pause marketing where key documents are missing.
2. Within 30 days: document one applicant assessment policy covering affordability, referencing and right-to-rent, then make sure staff or agents apply it consistently.
3. Before the next quarter-end: run a demand-pressure scenario for each property or block covering enquiry volume, achievable rent, turnaround time, contractor capacity and complaint risk.

The main lesson is straightforward: this is a demand-risk story, not a law-change story. If migration rises and supply remains weak, the landlords most likely to cope well will be those with complete files, consistent applicant handling and enough operational capacity to move quickly without skipping legal steps.

General information only, not legal or tax advice.