Landlords have issued a fresh warning that rents in the capital are set to surge once again, as new government data reveals a sharp decline in the number of properties available in the private rented sector (PRS).

Figures released this week show that London’s private rental housing stock dropped by 6% in the past year alone—from 1.14 million homes in 2023 to 1.07 million in 2024. If this trend continues, the number of homes for rent in the capital could fall below the one million mark in 2025.

At the same time, demand is soaring, with property portal Rightmove reporting an average of eight tenants competing for every rental property listed in London.

The stark imbalance is hitting lower-income renters the hardest. A recent report commissioned by London Councils and Trust for London highlights that the fastest rate of housing loss is occurring in the capital’s most affordable boroughs, raising fears of deepening inequality and displacement.

“We’re losing vital stock in the very areas where people most need secure and affordable homes,” said a spokesperson for the National Residential Landlords Association (NRLA).

Landlords Demand Policy Reform

The NRLA is calling on the Government to intervene urgently to halt the outflow of landlords from the market.

Among its key proposals:

• Scrap the 5% stamp duty surcharge for landlords who purchase long-term empty homes and bring them back into use, particularly in boroughs struggling with housing shortages.

• Introduce tax reforms to incentivise long-term letting and investment in the PRS, helping to build a more stable, professionalised rental sector.

• Reform the courts so landlords can swiftly regain possession of homes in legitimate cases—such as serious rent arrears or anti-social behaviour—particularly in light of the upcoming ban on “no-fault” Section 21 evictions.

“If landlords are going to lose Section 21, they must have confidence that the justice system will work for them when things go wrong,” said an NRLA spokesperson.

Currently, official data shows it takes over six months on average for courts to process and enforce a straightforward possession case, even in situations involving antisocial tenants or thousands of pounds in unpaid rent.

Crisis in the Making

Landlord groups argue that the decline in rental supply is being fuelled by increasing costs, legal uncertainty, and unfavourable tax policies. Many landlords have exited the sector entirely, choosing to sell up rather than navigate an increasingly complex regulatory landscape.

They warn that unless conditions improve for responsible landlords, rents will continue to rise, tenant choice will diminish, and vulnerable renters will be squeezed out of the capital altogether.

“We need a rental market that works for both landlords and tenants,” said one long-time landlord in north London. “Right now, it feels like everyone’s losing—except maybe the Treasury.”

The warnings come just weeks before the Renters’ Rights Bill returns to the House of Commons, where several Lords amendments are expected to spark fierce debate, particularly those affecting court reforms and deposit limits.