RICS July snapshot: fewer landlord instructions, firmer rent expectations — why London landlords should audit files now

RICS July snapshot: fewer landlord instructions, firmer rent expectations — why London landlords should audit files now

RICS’ July market snapshot makes one point clearly: rental stock is still tightening because landlord instructions are falling, and surveyors expect rents to keep rising. That is a market signal, not a law change. No new statutory duties or deadlines were announced in the RICS commentary, but for London landlords it creates an immediate operational issue: if you plan to increase rent, re-let, refinance or sell into a stock-starved market, your paperwork needs to be in order first.

What the RICS snapshot actually says

The confirmed position is straightforward. RICS members reported falling landlord instructions across the UK, broadly flat tenant demand, and stronger expectations of further rent increases. They also cited tax, regulation and affordability pressures as reasons some landlords are reducing portfolios or exiting.

RICS did not, in the material referenced here, publish borough-level London figures. Landlords should not assume every local market is moving in the same way. Inner and outer London can differ materially on affordability ceilings, void risk and achievable rent growth.

Why this matters even without any new legislation

For single-property landlords, a rising-rent market can mask compliance defects until a tenant challenges them or a buyer’s solicitor requests the file. Before any rent review or remarketing exercise, check that you hold:

• a current gas safety record, where gas is installed
• a valid EICR, where required
• an EPC
• evidence that smoke alarms and carbon monoxide alarms were installed and tested as required
• deposit protection paperwork, where a deposit was taken
• Right to Rent records
• any required property licence documentation

If the property is in a licensing area, verify the position against the relevant borough scheme rather than relying on an old note on file.

In London, licensing risk is local

This matters because licensing risk in London is local, not national. A landlord with one flat in Sutton and one HMO in Newham may face different licence rules, fees and renewal dates.

If you are considering a sale with a tenant in situ, missing or expired local licences can delay the transaction or reduce buyer appetite, particularly where the purchaser needs mortgage finance.

A practical step is to pull together a compliance pack for each property this month, with certificates, licence references, prescribed information and tenancy documents in one folder.

Portfolio landlords should model exits, voids and rent pressure

Portfolio landlords and BTL companies should go further and stress-test cashflow against three scenarios over the next six to 12 months:

1. a further rent increase
2. a longer void
3. a disposal at a lower-than-expected price after costs

RICS’ sales commentary was also weak, with subdued buyer enquiries and agreed sales, so an exit may not be quick even if rental supply is tight.

If you are selling one or more units, model the likely capital gains tax or corporation tax treatment before instructing agents. The RICS report identifies taxation as a pressure, but it does not change tax rules. The risk lies in poor planning, not in any new announcement.

Rent rises need evidence, not just confidence

For landlords thinking of raising rent, process matters more than ambition. London rents may still be rising, but affordability is stretched in many boroughs, and an overreach can create arrears rather than improve yield.

Use current local comparables from the same postcode sector rather than headline London averages, and keep a record of the basis for any increase. If the tenant is reliable, a smaller increase paired with a longer fixed term may be cheaper than a void, redecoration and reletting costs. That is often particularly true for family homes in higher-rent boroughs, where replacement tenants face tighter affordability checks.

If you are selling, expect document scrutiny early

If you are reducing a portfolio, do not leave compliance checks until heads of terms are agreed. A buyer, lender or conveyancer is likely to want:

• the tenancy agreement
• deposit protection certificate and prescribed information
• gas safety history
• EICR
• EPC
• licence documents, where applicable
• evidence relating to alarms and Right to Rent

Missing records can affect value because they increase perceived legal risk. In practice, that may mean a price reduction, retention, delayed completion or a buyer walking away. For HMOs, scrutiny is likely to be tighter because management standards, amenity requirements and licence conditions are more document-heavy.

Agents should prepare for more file handovers

Managing agents should also prepare for more handovers if landlord exits continue. Client money records should reconcile cleanly, inventories should be accessible, and tenancy files should be exportable at short notice.

If a landlord moves from full management to sale, or from one agent to another, unresolved deposit issues or patchy repair logs can become expensive quickly. There is no new legal deadline here, but the market pressure described by RICS increases the likelihood that old administrative gaps will be exposed.

Two sensible actions before month-end

Two immediate steps make sense before the end of this month.

First, run a property-by-property compliance audit and fix any expired gas safety certificates, out-of-date EICRs, missing EPCs, unprotected deposits or licence uncertainties before you market, refinance or review rent.

Second, ask your accountant for a disposal and cashflow model covering rent rises, voids and tax on any sale, especially if you hold some properties personally and others through a company.

Then set a 30-day review cycle while the market remains unsettled. Check local asking rents, arrears exposure, renewal dates for certificates and licences, and whether each property still meets your target yield after tax and maintenance.

If you are an agent, send landlords a short file-gap report now rather than waiting for a sale instruction.

This article is general information, not legal or tax advice.