Landlords Corner – London's Rental Market: New Rules, New Risks
As your local Leytonstone property experts, we're seeing significant changes in London's rental market that every landlord should be aware of. Here's our straightforward breakdown of the current situation and what lies ahead.
The Current State of Rental Arrears
Recent market data shows some concerning trends in rental payments. The average rental arrear has jumped to £2,597 - a 44% increase over the past year. This is particularly worrying as the typical rental deposit of £1,228 leaves landlords potentially exposed to losses of over £1,300 if things go wrong.
London continues to face the highest number of rental arrears cases in England, accounting for a quarter of all cases nationwide. While this partly reflects our larger rental market, it's still a statistic that demands attention.
What's Driving These Changes?
Several factors are affecting the rental market:
● Interest rates remain high at 4.75%, though we've seen a slight easing from the peak of 5%. This continues to put pressure on landlord mortgages, with over 12,500 buy-to-let mortgages falling into arrears at the end of 2024.
● The average London rent has settled at £1,081, but many tenants are still struggling with rising living costs. More than half of adults reported increased living costs in recent months, and employment figures have shown their largest drop since 2020.
Looking Ahead: The Renters' Rights Bill
The upcoming changes to rental laws will significantly impact how we manage properties. Key changes include:
● The end of 'no-fault' evictions (Section 21)
● New rules around rent arrears and eviction notices
● Changes to pet policies and deposit handling
● A shift to periodic tenancies
These changes mean landlords will need more robust systems and support in place to protect their investments. This is an area of expertise we offer, and it has helped many local landlords like you save time and be confident everything is taken care of. With our landlord services, you can relax knowing we take care of all the administrative tasks, existing and new, your business requires.
How We Can Help
As your local property experts in Leytonstone, we've been helping landlords navigate market changes for years. Our comprehensive services include:
- Professional tenant referencing and background checks
- Regular property inspections and maintenance coordination
- Rent collection and arrears management
- Expert guidance on legal compliance and regulation changes
What are industry specialists saying?
As you would expect, many industry specialists are keen to have their say on this topic.
Ben Grech is the CEO of Reposit, and he said: “With average arrears now surpassing £2,500, the shortcomings of cash deposit schemes have become increasingly evident. This is concerning for landlords, especially with the upcoming Renters' Rights Bill, which will abolish Section 21 evictions and eliminate a key layer of protection.”
Bekki Leaves is the Managing Director of FCC Paragon, and Bekki believes there are serious issues for landlords to be aware of. She said: “Whilst the Renters’ Rights Bill may have been designed with the best intentions, the rental sector is facing some very serious consequences and we anticipate a continued spike in rental arrears to be one of them. The move to periodic tenancies, the abolition of Section 21 and preventing tenants from offering more cash upfront to offset income concerns will all contribute to an increased level of vulnerability on the side of landlords.”
At Trading Places, we’ve seen many changes in the rental market, and we stay in touch with changes so you can stay ahead of the market.
Staying ahead in the Leytonstone rental market
If you are looking for guidance on the Leytonstone rental market, or you just want a helping hand in complying with rental market regulations, we are always here to assist you.
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