Prime rents rise as landlords adjust portfolios amid higher costs and regulatory changes – Savills
Its prime rental indices showed values increased 1.3% across prime regional markets and 1.2% in outer prime London in Q2 2026.
Prime rents continued to rise over the past three months as landlords adjusted portfolios to offset higher costs and regulatory changes, according to Savills.
Its prime rental indices showed values increased 1.3% across prime regional markets and 1.2% in outer prime London in Q2 2026.
Prime central London saw a smaller rise of 0.4%.
Jessica Tomlinson, research analyst at Savills, said: “Landlords are continuing to adapt to a changing regulatory environment following the introduction of the Renters’ Rights Act, while also contending with higher mortgage costs and an increased tax burden.
“As a result, many are reassessing rental values across their portfolios to help offset rising operating costs.
“At the same time, the implementation of the RRA has further prompted some landlords to test the sales market, further reducing the amount of stock available.”
Tomlinson added: “All this combined has supported growth in rents, despite economic headwinds.
“However increases are strongest in markets most impacted by the RRA.”
The research also found almost half of Savills agents in London and seven in 10 agents outside the capital identified the Renters’ Rights Act as landlords’ main concern, with the abolition of Section 21 cited as the most significant issue.
Around half of landlords were considering reviewing rental values.
82% of agents in London said landlords expect rental values to increase, compared to 30% of tenants.
Rental growth was strongest in the South West at 1.6% and West London at 1.4%, with Fulham, Chiswick and Wandsworth seeing the highest upward pressure.
In prime central London, rents for homes below the £100,000 per annum threshold rose 0.7% in Q2, compared to 0.1% for higher value properties.
Outer prime London saw rents for properties affected by the RRA increase 2.7% in the past year, compared to 1.7% for those above the threshold.
Tomlinson said: “Tenants in prime central London are becoming increasingly discerning, with demand focused firmly on best-in-class properties that offer strong value for money.
“With less urgency in the market, right pricing is becoming increasingly important, with tenants more price-sensitive and willing to shop around.
“Landlords who ensure properties are accurately priced from the outset will attract and retain the best quality tenants.”
Prime regional markets saw rents rise 1.3% in the quarter, with growth led by the South West, Cotswolds and regional towns and cities, reporting quarterly growth between 1.7% and 1.9% as seasonal demand put pressure on rents.
Since March 2020, net growth averaged 26.0% in outer prime London and 28.0% in regional markets.
Savills forecasted additional growth between 6-13% across prime markets in the next five years as stock remains constrained.
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