Prime central London rents have posted their strongest quarterly growth in two years, Savills reveals, as landlord caution around the Renters’ Rights Act squeezes available stock at the top end of the market.
The agency’s latest prime lettings data shows PCL outperforming after a subdued run, with the sharpest gains concentrated in homes let below the Act’s £100,000 annual rent threshold where landlords face the greatest regulatory exposure. Almost half of Savills agents named the Act as the key landlord concern, ahead of tax on rental income and higher mortgage costs.
Supply is doing the heavy lifting on rents. Landlords most exposed to the new rules have held back listings in lower rental bands, sharpening competition among tenants and nudging asking rents higher even as affordability limits how far they can climb. Yields across prime central London now stand at their strongest since 2009.
Sub-£100,000 stock feels the RRA squeeze
Savills said the impact of the legislation has split the prime market. Properties with annual rents below £100,000, where the Act bites hardest, have seen the strongest rental growth as reduced stock intensifies bidding. Jessica Tomlinson, research analyst at Savills, said landlord caution was constraining supply in those bands. “There are signs that landlord caution is continuing to constrain rental supply, particularly in the lower rental value bands where pressure is most acute,” she said.
Tomlinson said affordability was still capping the pace of rises. “That, in turn, is helping to support rental growth, although affordability constraints continue to limit the pace of increases,” she said.
This follows Landlord Knowledge’s July report on Savills’ second-quarter prime lettings data, which found the Act was already lifting prime rents as landlords repriced risk. The third-quarter figures suggest that pattern has hardened, with the strongest PCL quarter in two years confirming the squeeze rather than reversing it.
Yields hit strongest level since 2009
Across prime central London as a whole, yields are now at their strongest since 2009, Savills said. Firmer rents combined with softer capital values have rebuilt the income return, giving well-placed landlords a clearer reason to stay invested despite the tougher compliance backdrop.
The agency linked the yield rebuild to pragmatic pricing. Tomlinson said landlords were weighing voids against headline rents. “Landlords are becoming more pragmatic on pricing, recognising that securing a suitable tenant is often preferable to facing a costly void period,” she said.
Short-term letting has become a less workable exit for many owners, the agency added, which keeps more stock in the long-term market and supports supply even as some landlords reconsider their options. With mortgage costs still elevated, the stronger yield helps offset the finance drag reported in Beauchamp’s September analysis of surging prime London house rents.
Regions diverge as affordability caps growth
Prime regional markets grew 0.3 percent on the quarter and stand 1.5 percent higher on the year, Savills said. London’s outer commuter belt led the annual table, with rents now 33 percent above the first quarter of 2020. Birmingham, Edinburgh and Manchester posted the strongest quarterly gains, driven by smaller homes where demand stays firm.
“Rental growth remains in positive territory this quarter though the pace of growth remains well below the levels seen during the post-pandemic surge,” Tomlinson said. She said many tenants were hitting budget limits, which was acting as a ceiling even where stock is tight.
The full implications of the Act remain open. “It remains too early to judge the full legacy of the Renters’ Rights Act. For now, we know that it has made some landlords more cautious, and some have reassessed their options,” Tomlinson said. The official guide to the Renters’ Rights Act sets out the current duties landlords must meet.
What this means for landlords
- If you let below £100,000 a year in prime London: reduced competing stock supports asking rents, but price against affordability ceilings to avoid voids.
- Watch for: tenant budgets topping out and longer lets becoming the safer route as short-term options narrow.
- Bottom line: yields at their best since 2009 reward landlords who stay compliant and keep homes occupied.
Editor’s view
Prime yields at a 17-year high change the maths on exit talk. Regulation has thinned the field in the sub-£100,000 band, and landlords who price sensibly and stay the course are collecting the premium. Caution is rational, but a panicked sale into a firming rental market looks like the wrong trade.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 16 October 2026
Sources: Savills, Gov.uk
Related reading: Savills: RRA costs lift prime rents again in Q2
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