Prime rental values continued to grow over the past three months despite upcoming regulatory changes, according to the latest Savills prime index, with values in Prime Central London experiencing the biggest pick-up in growth since June 2023.

Source: Savills prime London and prime regional lettings indices, Q3 2025

Despite continued momentum in the market, tenant and landlord continue to have different expectations on the direction of prices across the outer prime London and prime regional markets.

Across these markets, Savills agents reported a significant majority of tenants expected rents to fall over the past three months — 73% in prime regions and 63% in outer London. In contrast, landlords remained optimistic on price, with 88% in outer London and 47% in prime regional locations anticipating rental growth.

“In anticipation of the Rental Reform Bill becoming law, landlords are likely to hold steady on rents, or indeed raise the asking price, to preserve competitive demand among tenants. While in some markets, landlords will be more concerned about securing reliable, high-quality tenants,” continued Jessica Tomlinson.

The strongest growth recorded by Savills was across regional towns and cities at 1.9% on the quarter, driven in part by a seasonal return of international students, largely driven by a strong uptick in values across Brimingham (3.5%) and Manchester (1.6%).

Here, and across the majority of prime markets, flats are outperforming houses on the quarter (2.5% vs 0.6%) as tenants prioritise access to jobs and amenities.

The same is true in PCL, which is experiencing a knock-on effect on would-be international homeowners looking to reduce their footprint in the Capital by shifting their focus to the lettings market. Rents for flats in PCL have grown by 1.1% in the quarter, compared with 0.2% for houses.

More broadly, gross rental yields in the prime lettings market have improved and risen across all parts of London, but most prominently for flats. Most notably, flats in West London and North and East London now attract average yields of above 5%, a significant increase compared with recent years.

Jessica Tomlinson, research analyst at Savills, said: “The Renters’ Rights Bill has been simmering in the background for the past two years but is finally in its final stages of scrutiny. It’s potential to reshape the UK lettings landscape looms large, and landlords and tenants can expect a shift in their experience of the market, which for some will feel more radical and sooner than expected.

“But for now, its impact has been limited. Whilst we did see early discussions regarding the Bill cause some market disruption, with landlords considering exiting, of Savills tenancies that ended in 2024 and 2025 so far only a small proportion (6%) of landlords cited the Renters’ Rights Bill as a reason for selling up. While in a separate survey, just 29% of Savills agents reported new regulation was the main concern for landlords. At the same time, rental values remained robust across the board, although growth has slowed across some markets.

“We may see more landlords reassess their position once the Act becomes reality, but the weak sales market may reduce the opportunity to exit the rental market for some.”