By Katinka Hill, Head of Lettings
After nearly 20 years working across London's rental market, one thing I have learnt is that landlord and tenant behaviour often changes long before the headlines catch up.
Over the past 18 months, we have all read the negative headlines surrounding the Renters' Rights Act and its impact on landlords.
Much of the initial concern was understandable. The legislation represents the most significant reform of the private rented sector in a generation and, when it was first introduced to Parliament in September 2024, it prompted many landlords to reassess their investments.
Industry research reflected this uncertainty. The National Residential Landlords Association found that 33% of landlords planned to reduce their portfolios.
However, the conversations we are having today are very different. Whilst challenges remain, there are growing signs that confidence is returning.
Many landlords have adapted to the new landscape and are increasingly focused on how to make the most of market conditions that continue to favour quality rental homes. The focus has shifted away from the legislation itself and towards a market where demand continues to exceed supply.
Increasingly, priorities are centred around retaining good tenants, reducing void periods and creating stable, sustainable tenancies.
Recent data from Chestertons suggests London's rental market remains highly resilient.
In May, enquiries on our lettings portal rose by 17% compared with a year earlier. Instructions rose by 34% - reversing several months of weaker activity. Much of that uplift reflects landlords who had been waiting to see how the act bedded in before deciding to let their properties.
The biggest increase in instructions was in South West London, up 5%, an area that tends to attract more single-property owners who are often more cautious in their decision-making.
At the same time, the supply of available rental properties fell by 17%, while landlord price reductions declined by 36%.
That last figure is worth unpacking. Under the Renters' Rights Act, tenants are no longer permitted to offer above the asking rent.
As a result, some landlords are factoring that ceiling into their pricing from the outset -building in a degree of headroom for situations where multiple applicants come forward, which does happen, particularly in the spring and summer market.
This is, in some respects, an unintended consequence of the legislation and one we are advising landlords on carefully.
We are also seeing evidence that some prospective buyers are delaying purchasing decisions amid ongoing economic and geopolitical uncertainty.
Chestertons' sales data showed buyer enquiries falling by 17% year-on-year in May, suggesting that some would-be purchasers are remaining in the rental market for longer.
For landlords, this is encouraging news. Demand continues to outstrip supply across much of London, helping well-presented properties attract strong interest, reducing the need for price adjustments and limiting void periods.
Strong demand is only part of the story. Landlords also want confidence that their property is being shared with the widest possible pool of suitable tenants.
At Chestertons, our combination of street-by-street local expertise and a connected London-wide network helps us do exactly that. With 35 branches working as one team, we are able to connect applicants across London rather than restricting searches to a single neighbourhood.
In practice, this means a tenant who initially starts their search in one area may ultimately find the right property elsewhere with Chestertons, as their requirements evolve.
For landlords, this means a greater likelihood of finding the right tenant quickly.
One of the biggest shifts we are seeing is the growing importance of tenant retention.
With greater emphasis on longer-term occupation, many landlords are increasingly focused on maintaining positive relationships with reliable tenants and minimising unnecessary void periods.
A tenant who pays rent on time, communicates well and looks after a property can be one of the most valuable assets within a portfolio.
As a result, landlords are placing greater importance on finding a tenant who actually wants to live in their home long term and pay a reasonable market rent - rather than holding out for a higher offer that risks longer void periods and lost rental income.
Many are also increasingly looking for an agent to manage the property on their behalf, to help navigate the demands of the new legislation.
The legislation is also beginning to influence tenant behaviour. For years, many renters in London approached renting with a degree of uncertainty, never entirely sure how long they would realistically be able to remain in one place.
Greater security is now encouraging some tenants to put down deeper roots.
Many are becoming more invested in their homes, taking greater care of the property and building stronger connections within their local community.
For landlords, this can help create more stable tenancies and reduce the disruption and cost associated with frequent turnover.
Some landlords initially feared that the Renters' Rights Act would fundamentally weaken the private rented sector. What we are seeing instead is a market that is evolving.
The reality is that London still has a shortage of rental housing. Demand remains high, supply remains constrained and tenants continue to compete for well-presented homes.
For landlords who have remained in the sector, that is a powerful combination.
Whilst legislative change has undoubtedly altered how the market operates, it has not changed one of London's most enduring property truths: there are still far more people looking for good rental homes than there are homes available.
The landlords who are likely to benefit most from this new landscape are those who embrace longer-term tenant relationships, maintain high standards and focus on creating homes where people genuinely want to stay.
For many, the conversation is no longer about whether the market remains attractive, but how best to make the most of the opportunities it continues to offer.