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Long-term rental pricing in London should balance market value, tenant affordability, and current legal requirements. With rental bidding prohibited and rent increases strictly limited, it’s important to approach pricing strategically. Use strong evidence, market data, and compliant procedures to set the right long-let rental rate.
Key Takeaways:
- Set your initial long-term rental rate using local market evidence rather than relying on rental bidding to maximise revenue.
- The Renters’ Rights Act (RRA) prohibits rental bidding and limits rent increases to once per year for assured periodic tenancies.
- Form 4A is used for section 13 rent increases and requires at least two months’ notice.
- The RRA gives tenants the right to challenge increases if they believe the new rental rate exceeds the property’s open-market rent.
- Professional property management combines market intelligence with compliant rent-review processes to calculate the right rental rate.
Why Should You Pay Attention To Your Long-Term Rental Pricing?
Long-term rental pricing can no longer rely on informal bidding or flexible rent-review arrangements to maximise revenue. Landlords are expected to establish an accurate market rent from the outset. This doesn’t mean they’re no longer allowed to increase prices. But recent changes in local regulations require them to follow a formal process.
The Renters’ Rights Act (RRA) introduced changes affecting the overall Private Rented Sector (PRS) starting 1 May 2026. This included the abolition of Section 21, the shift to assured periodic tenancies, and the prohibition of rental bidding.
Rental bidding is where prospective tenants compete for a private rental property by offering to pay the landlord more than the advertised amount.
In the past, some tenants submitted a higher bid than the advertised amount to secure a rental property. Landlords and agents were allowed to accept the highest rental offer, regardless of who inquired first about the rental property. This unfair practice is no longer allowed under the RRA. Breaches could lead to fines of up to £7,000.
While this levels the playing field for tenants and cracks down on abusive landlords, it puts pressure on a landlord’s long-term rental pricing strategy. They need to set the right initial rental price because if they price it too low, they’ll leave income on the table. And if you price too high, you face longer void periods or struggle to attract suitable tenants. Not to mention, changing your rental rate is harder than before.
How Should London Landlords Set the Initial Rent?
The right initial rent should reflect comparable properties in the same location, with similar conditions and features, and exposed to the same demand. When searching for comparable properties, landlords should consider:
- Property size and layout
- Furnished or unfurnished
- Number of bedrooms and bathrooms
- Overall condition and quality of finishes
- Current local demand
- Location and proximity to transport links
- Outdoor space, parking, and other amenities
Landlords can use active listings on Zoopla and Rightmove to understand the market. However, you need to be cautious about the published asking prices, as these do not necessarily reflect what has been achieved.
At City Relay, our long-term lettings team combine market knowledge with property-level performance data to calculate the most competitive rental price. For example, a well-designed one-bedroom apartment that’s close to a major transport link may justify premium rental pricing over a similar property that’s further away. But our experts still ensure that the price is supported by comparable market data.
What Is Form 4A and How Does It Affect Long-Term Rental Pricing?
Form 4A is under Section 13(2) of the Housing Act 1988. It’s a formal 9-page legal document that a landlord serves on a tenant to notify them of the intention to raise the rent, the new rate, and when it will take effect.
Right now, the use of Form 4A is governed by specific parameters.
- Limited rent increases. Rent can be increased only once every 12 months, and the first increase may only take effect after the 52nd week from the start of the tenancy. Subsequent increases should also be 52 weeks after the previous one.
- Adequate notice is required. Tenants should be given at least two months’ notice before the new rent takes effect. It could be more depending on whether the rent is paid weekly or monthly.
- Schedule increases at the start of the tenancy period. Increases should also be dated to coincide with the beginning of a tenancy period. For instance, if it’s a weekly tenancy that starts on a Monday, the new rent should take effect on a Monday.
- The right to challenge increases. Tenants have the right to challenge a proposed rent and take it to the First-tier Tribunal if they believe it’s above the open-market level.
These parameters mean landlords should have an evidence-based pricing strategy. They should be able to demonstrate why a proposed increase is necessary and how it reflects the property’s current value and market position.
How can landlords build evidence for a rent increase?
Landlords should gather documents showing comparable properties, market conditions, and property-specific improvements before proposing a rent increase. Having a clear trail of evidence makes the pricing decision defensible and reduces the risk of relying on an arbitrary figure to determine whether the increase is justified.
When referencing comparable properties, make sure to include information on the location, condition, furnishings, size, and asking rent.
You should also consider improvements made to your property. An upgraded furnishing, improved amenities, or a refurbished kitchen is worth noting. These can strengthen your property’s market position, but they should still align with open-market rental standards.
At City Relay, monitoring market conditions throughout the year allows landlords to identify potential rent-review opportunities before an increase becomes necessary. We’ve found this to be more effective than discovering after a few years that the property has fallen below market rent and making a large adjustment at once.
What happens if you overprice a long-term rental?
Overpricing can reduce annual rental income by increasing vacancy periods and excluding tenants with affordability constraints. A fair and sustainable market rental rate can sometimes generate more income over a year than an ambitious asking price, only to be followed by weeks of vacancy because your tenant can no longer afford rent.
Consider a property that could realistically achieve £2,500 per month. If a landlord advertises a property at £2,700 but leaves it vacant for six weeks, the lost gross rent is almost £3,750. The £200 monthly premium would take approximately 18 months to recover the loss.
This is why our pricing strategy for long-term rentals focuses on annual net income rather than the highest possible monthly rent. We advise landlords to look at the bigger picture and not just the current rental rate.
Did you know…
The Office for National Statistics released the Private Rent and House Prices for August 2026, which revealed the average rent in London was £2,317, with the highest in Kensington and Chelsea at £3,629.
How Can Professionals Help Protect Long-let Income?
Professional property management companies combine London expertise with tech-driven market analysis and structured compliance processes to help set competitive rents. At City Relay, we provide landlords with access to data-driven reports that help them monitor market conditions and manage rent reviews efficiently.
Among the benefits landlords can get from professional management companies are:
- Property marketing
- Market-based rental pricing
- Tenancy administration
- Tenant communication
- Rent-review processes
- Maintenance coordination
- Compliance monitoring
- Property performance analysis
For example, rather than waiting until a property is under-rented, our lettings team at City Relay monitors comparable properties and market conditions to determine whether a compliant rent review is already warranted.
Our objective is not to increase rent aggressively. It’s to keep rental income aligned with the current market value while ensuring high occupancy and tenant retention.
Can Flexible Letting Give Landlord Pricing Flexibility?
Yes, flexible letting can give London property owners greater exposure to the changing market demand. However, each letting arrangement, whether it’s short-, mid-, or long-term, has its own distinct legal, licensing, planning, and contractual requirements.
We often use short- and mid-term strategies as an alternative for properties that do not want to exclusively rely on long-term tenancy. However, we also advise landlords to exercise caution when arranging mid-term lets, as an incorrect detail in the agreement could suddenly bring it under the Renters’ Rights Act.
Getting professional help is therefore important to ensure that the agreement’s nature and structure align with the right rental strategy.
Is Your Long-Term Rental Pricing Strategy Ready?
Long-term rental pricing in London is no longer about finding the highest rent a tenant might accept. It’s about obtaining an accurate market price, reliable evidence, and compliant rent reviews to justify an increase.
With rental bidding strictly prohibited, it’s important for landlords to ensure their initial pricing is correct. It minimises the need to raise rent early without compromising your property’s earning potential. The new section 13 process makes rent reviews more structured, and with tenants given more rights to dispute increases, it’s important to have defensible market evidence to prove your claim.
In our experience, the smartest approach is to price accurately from the start, monitor continuously, review strategically, and stay compliant.
City Relay’s long-term letting expertise can help you understand how your property can thrive in the constantly evolving rental market in London. If you want to identify opportunities to improve your rental property’s performance, we’re here to support you.
FAQs
How often can a London landlord increase rent?
For an assured periodic tenancy, landlords can generally increase rent only once every 12 months. When increasing rent, the Section 13 process must be followed. This includes serving the prescribed notice at least 2 months before it takes effect. Tenants also have the right to challenge an increase through the First-tier Tribunal if they are not satisfied with the documents you presented to justify it and they think it’s above the open-market value.
What is Form 4A for London landlords?
Form 4A is the notice used for a Section 13 rent increase on an assured periodic tenancy. It replaces the informal approach of increasing rent where the Section 13 process applies. The proposed rent should reflect the property’s open-market value because tenants can challenge an excessive increase.
Is rental bidding illegal for London landlords?
Yes, rental bidding is now prohibited in London under the Renter’s Rights Act. Landlords and letting agents must advertise a specific rent instead of a range. They cannot encourage prospective tenants to offer more than the advertised amount. Local authorities will impose civil penalties of up to £7,000 for any breach of this rule. This means landlords should be careful in setting initial long-term rental prices to minimise the need to increase rent without compromising rental revenue potential.
How should landlords set long-term rental pricing in London?
Landlords should base long-term rental pricing on comparable properties and current local market conditions. They should consider factors such as property size, location, condition, furnishings, transport links, and amenities to determine the appropriate rent. Looking at active listings can help, but take heed, some asking prices do not necessarily reflect the final agreed rent.
Landlords should also consider vacancy costs when deciding on rent to avoid pricing a property too aggressively. Professional property managers have systems in place that provide market data that can serve as a landlord’s long-term rental pricing guide.
