Prime rental values continued to develop over the previous three months regardless of upcoming regulatory modifications, in line with the newest Savills prime index, with values in Prime Central London experiencing the largest pick-up in progress since June 2023.
| Q3 2025 | Annual progress | |
| Prime Central London | 0.7% | 0.8% |
| Outer prime London | 0.6% | 2.4% |
| All prime regional | 0.2% | 1.1% |
Supply: Savills prime London and prime regional lettings indices, Q3 2025
Regardless of continued momentum available in the market, tenant and landlord proceed to have completely different expectations on the course of costs throughout the outer prime London and prime regional markets.
Throughout these markets, Savills brokers reported a big majority of tenants anticipated rents to fall over the previous three months — 73% in prime areas and 63% in outer London. In distinction, landlords remained optimistic on value, with 88% in outer London and 47% in prime regional places anticipating rental progress.
“In anticipation of the Rental Reform Invoice changing into legislation, landlords are prone to maintain regular on rents, or certainly increase the asking value, to protect aggressive demand amongst tenants. Whereas in some markets, landlords might be extra involved about securing dependable, high-quality tenants,” continued Jessica Tomlinson.
The strongest progress recorded by Savills was throughout regional cities and cities at 1.9% on the quarter, pushed partly by a seasonal return of worldwide college students, largely pushed by a robust uptick in values throughout Brimingham (3.5%) and Manchester (1.6%).
Right here, and throughout nearly all of prime markets, flats are outperforming homes on the quarter (2.5% vs 0.6%) as tenants prioritise entry to jobs and facilities.
The identical is true in PCL, which is experiencing a knock-on impact on would-be worldwide householders seeking to cut back their footprint within the Capital by shifting their focus to the lettings market. Rents for studios in PCL have grown by 1.1% within the quarter, in contrast with 0.2% for homes.
Extra broadly, gross rental yields within the prime lettings market have improved and risen throughout all elements of London, however most prominently for studios. Most notably, flats in West London and North and East London now appeal to common yields of above 5%, a big improve in contrast with latest years.
Jessica Tomlinson, analysis analyst at Savills, mentioned: “The Renters’ Rights Invoice has been simmering within the background for the previous two years however is lastly in its closing phases of scrutiny. It’s potential to reshape the UK lettings panorama looms massive, and landlords and tenants can anticipate a shift of their expertise of the market, which for some will really feel extra radical and earlier than anticipated.
“However for now, its impression has been restricted. While we did see early discussions relating to the Invoice trigger some market disruption, with landlords contemplating exiting, of Savills tenancies that led to 2024 and 2025 thus far solely a small proportion (6%) of landlords cited the Renters’ Rights Invoice as a motive for promoting up. Whereas in a separate survey, simply 29% of Savills brokers reported new regulation was the primary concern for landlords. On the similar time, rental values remained sturdy throughout the board, though progress has slowed throughout some markets.
“We might even see extra landlords reassess their place as soon as the Act turns into actuality, however the weak gross sales market could cut back the chance to exit the rental marketplace for some.”
