London's private rental market is tightening as landlords grow wary of letting to students and young professionals
Landlords across London are becoming increasingly reluctant to let properties to students, young professionals and newly arrived NHS staff, eight weeks after the core tenancy reforms in the Renters' Rights Act came into force on 1 May.
Nouran Moustafa (pictured top), executive financial and mortgage adviser at Roxton Wealth in London, told Mortgage Introducer landlords are tightening who they let to as they weigh the risk of arrears under the new regime, which abolished Section 21 "no-fault" evictions and requires landlords to wait until a tenant is three months behind on rent before they can apply to court for possession.
"Nobody is going to rent to young professionals or students easily after this Renters' Rights Act," she said.
Why are landlords becoming more cautious?
Moustafa revealed the caution set in well before the Act's commencement date, as landlords in London – unlike in cities such as Liverpool, which sees far less tourist demand – recognised how easily a flat could be switched to short-term letting instead.
"The problem in the London market is that it's a very easy market to rent a flat or a house on Airbnb or a short-term holiday let, and you're charging per night, not per month," she said. "If you rent the flat for 10 or 15 nights, it's going to be more than the rent you'd get in one month renting it out regularly."
That caution extends beyond short-term lets into prime London property investment, Moustafa said, with overseas buyers – including UK expats – also pulling back.
"Investors are no longer at ease putting money into London's prime postcodes because of that risk," she said. "You had a lot of people from the Gulf countries – British expats living in Dubai and elsewhere – who used their savings abroad to buy houses in London's prime areas, with the plan of renting them out for a couple of years until they moved back to the UK. You have absolutely killed that idea with the Renters' Rights Act."
That dynamic, combined with rising mortgage costs, drove some landlords to serve notice on tenants ahead of the changes rather than risk being caught by the incoming rules, Moustafa said. Her account echoes wider market commentary, with analysis of whether the Renters' Rights Act is helping or harming tenants pointing to shrinking rental supply at precisely the moment tenant demand is at record levels.
How are students and young professionals affected?
Moustafa said the practical effect of the Act has been to make landlords far more selective, particularly with tenants who lack a long employment or rental history in the UK. She pointed to NHS staff who relocate between hospital trusts during training as a group being squeezed out of the market.
"Even if they've got savings from countries they've worked in before, they can't really buy a property because they don't know where their contract – and their training – is going to leave them next," she said, referring to newly qualified overseas doctors who typically move between short-term training contracts in different UK cities before they can settle.
Other brokers have noticed the same shift, though they describe it as a slow squeeze rather than a sudden shock. Reporting on brokers bracing for the real buy-to-let reckoning suggests the real disruption to lending is still ahead.
What is the economic argument for landlords?
Moustafa argued landlords are being unfairly targeted given their contribution to the tax base and to housing supply for people who cannot yet buy.
"Why are we attacking landlords?" she said. "A landlord buys a property and pays the additional stamp duty rate on it, that's revenue to the government. If it's owned in a limited company, they pay corporation tax on the rental income. If it's owned in a personal name, they pay income tax on it. And on top of that, they help professionals and young students settle into the city."
Separate research suggests Moustafa's concerns are shared by a meaningful share of the market. A LegalforLandlords survey of more than 900 UK landlords found 24% intend to leave the sector altogether, while a further 13% expect to reduce the number of properties they let.
Moustafa remains supportive of stronger protections for renters in principle, but she believes the balance struck by the Act has tipped too far against landlords, deepening the very accommodation shortage it was designed to ease for London's students and young professionals.
"I genuinely don't know why they are attacking landlords."
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
