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When deciding whether to sell or rent your London property, it’s crucial to assess both current sales market conditions and rental income opportunities. For many landlords, renting the property while waiting for the right buyer can generate income, preserve the property’s condition, and reduce pressure to accept a discounted offer.
Key Takeaways:
- More landlords are thinking of selling their property after the Renters’ Rights Act and the Autumn Budget 2025 came into effect.
- Tax increases and new compliance requirements do not diminish the strong rental yield opportunities in London.
- Timing is crucial to get a reasonable selling price for properties in the UK.
- Short-term or mid-term letting offers a viable solution to avoid the effects of RRA while keeping the property earning before it sells.
- Efficient property management plays a huge role in maximising rental returns and occupancy rates while keeping the property market-ready.
Should I Sell or Rent My Property in London: That is the Question
After all the changes in the rental property market, landlords are asking themselves: Should I sell or rent my property in London?
The Renters’ Rights Act and the Autumn Budget 2025 have created uncertainty among property owners in the Private Rented Sector (PRS).
The Renters’ Rights Act brings an end to Section 21, introduces new compliance obligations, strengthens council enforcement powers, mandates registration, and imposes additional administrative responsibilities.
The Autumn Budget, on the other hand, brings additional financial pressure on rental income tax (+2% starting in 2027), a High-Value Council Tax Surcharge for properties valued at £2m+, and frozen thresholds until 2031.
Both prompted most landlords to reassess their long-term strategies to minimise the effects of the back-to-back policies on their rental income. It has even made others question if maintaining their rental properties would still be worth it, or if it’s a sign to arrange their exit.
Did you know:
The government’s English Private Landlord Survey 2024 revealed that 31% of landlords plan to reduce their property portfolios over the next 2 years, while 16% plan to sell their portfolios entirely.
While selling might seem appealing, don’t be too rash with your decision. Although the regulations and costs make rental properties less appealing, selling a flat may not be the perfect solution to cut losses. At least, not yet.
It’s important to study the market and ensure that selling won’t make you compromise and end up with a considerable discount on the property sale.
Is It a Good Time to Sell Your London Property?
To answer this question, you need to look at what’s been happening before the Renters’ Rights Act and Autumn Budget came into play.
In April of this year, the Stamp Duty Land Tax threshold changed. It made buying properties more expensive. This, among other reasons, may have caused buyer demand to fall by 12%, as revealed by Zoopla’s House Price Index in November 2025. While the decline in buyer demand doesn’t automatically mean property prices will fall sharply, it generally increases competition among sellers and may lengthen the time needed to get an acceptable offer.
According to the Savills UK Housing Market Update in September 2025, annual house price growth is down 0.4% over the last 3 months. If landlords start selling now because of the new regulations and tax obligations, this will increase housing supply in the market. This, together with the decrease in buyer demand, may cause housing prices to fall further.
If this goes on, you might have a hard time getting the price you want for your property.
On the other side of the market, Rightmove’s Rental Market Update in October 2025 shows the rental market situation holding steady, with the number of rental homes available increasing by 9% and tenant demand dropping by 14%. The softening of tenant demand and the constrained rental supply across London is helping support rental values. Rental rates reached new heights, averaging £1,385 per month. In London, the average monthly rental rate is £2,736, a 1.6% increase from 12 months ago.
What does this mean?
While landlords can choose to sell their property, it’s important to take advantage of the growing rental income. Remember, the RRA and the Autumn Budget have not yet taken effect. Instead of unloading properties in a market that might force sellers to accept a discounted price, why not keep renting while waiting for the market to be more favourable?
Why Renting Before Selling May Be Worth Considering
When strict regulations and higher taxes make you ask, “Should I sell or rent my property in London?” stop to consider how quickly you can sell it first. Although Zoopla reports that the average time to sell properties is 38 days, some properties still take up to 6 months to sell.
The time to sell refers to the period between the day the property is listed until the signing of the contract between the buyer and seller.
Don’t waste your property by leaving it empty while you wait for it to sell. With City Relay’s flexible letting strategies, you can continue earning while keeping the property ready to sell when the right buyer makes an offer.
There are several reasons why this is a smart move.
- Well-maintained properties. Shortlets and midlets are fully furnished properties that can be rented for a couple of days to a few months. It also keeps the property staged for buyer viewings. Across City Relay-managed properties, regular housekeeping, inspections, and maintenance between bookings help keep homes presentation-ready for both guests and prospective buyers.
- No forced-sale discounts. Generating rental income while marketing a property may reduce financial pressure to accept low-ball offers just to get a quicker sale. For instance, a one-bedroom flat that’s generating rental income from short- and mid-term stays can afford to pay mortgage payments, service charges, and holding costs. Of course, actual performance will depend on occupancy, operating costs, and market conditions. But when a property is well managed and occupancy rates are maintained, the losses are minimised.
- Ensures flexibility. Shortlets and midlets won’t tie properties to long leases. If the right buyer comes with a good offer, it’s easier to pull the property from rental listings and proceed with the sale.
What you get from professional property management
At City Relay, we help landlords keep properties sale-ready while they continue generating rental income through:
- Flexible letting that allows buyer viewings and sale progression
- Professional housekeeping between guests to keep the property market-ready
- Dynamic pricing to maximise revenue in the midst of the marketing period
- Maintenance inspections to ensure premium property condition
- Guest management to ensure positive reviews about the property
- Compliance monitoring throughout the rental and marketing period
With property managers handling daily property operations, landlords can focus on their portfolios and property sales.
What this looks like financially…
Let’s assume a buyer makes an offer but negotiates a £20,000 price reduction. If your property is earning £2,736 a month (the average monthly rental rate in London, according to Rightmove), you can afford to wait, even if it takes 6 months to secure a better offer.
You will continue to earn while you wait, and the regular housekeeping and maintenance between bookings will keep the property in pristine condition for buyer viewings.
Of course, you need to consider these numbers together with mortgage costs, service charges, operating expenses, and the market selling price. But knowing the property’s earning potential will give you a clearer picture of what you’re really losing as the sale price is negotiated.
Should You Sell or Rent Your Property?
Timing is the key to getting a reasonable price when you sell your property. For many London landlords, it’s not just about choosing between selling and renting. It’s about deciding when the right time to sell is and allowing the property to earn while waiting for the right offer.
Flexible letting can provide additional cash flow, preserve the property’s condition, and keep future selling options open while market conditions evolve.
Explore the possibilities flexible letting can offer you. City Relay is here to help you achieve maximum rental revenue while keeping your options to sell open.
Our lettings team can help determine your property’s income potential. Get a free rental estimate now.
FAQs
Is 2026 a good time to sell my property in London?
A good time to sell is when you get the right selling price. It’s okay to keep your property listed, but be reminded that properties listed for a long time do not always inspire buyer confidence.
Choose the right season to list your property and rent it out while waiting. Spring and Autumn are generally the two best times to sell a property, while Summer and Winter are the worst.
Will the Renters’ Rights Act make renting out a property harder?
It will depend on how you want to rent out your property. If you’re planning to let your property long-term, then yes, your property will be affected by the Renters’ Rights Act (RRA). As a short-let, the property operates under a different legal framework from assured tenancies governed by the RRA. As a mid-let, the agreement should be structured carefully so it won’t fall within residential tenancy rules.
Let City Relay guide you through flexible letting so your property can minimise the effects of both RRA and the 90-day limit on your rental income.
Can renting generate more income than selling?
This depends on how long you plan to rent out your property. Sometimes, renting can help you earn up to £10,000 in 2 months while you wait to sell, which happened to one of the properties City Relay managed.
Of course, rental income during a sales period will still vary depending on property size, location, seasonality, and operating costs. By ensuring proper maintenance and compliance, you can continue earning while showcasing the property’s premium condition for sale.
