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.