Knight Frank says some sectors of the rental market are already being hit as a result of the Renters Rights Act (RRA) while a new threat is emerging thanks to prospective Prime Minister Andy Burnham.

Tom Bill, head of UK residential research at the agency, highlights “the rumoured alignment of capital gains and income tax rates under a new Andy Burnham government, which would hit higher and additional rate income taxpayers hardest.”

This is despite some analyses suggesting that pushing Capital Gains Tax rates higher would reduce the tax take.

Bill, in a weekly blog, continues: “A growing mood of caution ahead of the autumn Budget and imminent change of government means wealthy investors are hesitating even about renting in prime central London.

“With the government seemingly unable to cut spending meaningfully or introduce broad-based tax rises, we could see a repeat of last year’s smorgasbord approach of smaller wealth-based rises like the higher-value council tax [the so-called Mansion Tax].

“The rental market had initially benefited from rule changes such as the ending of non dom status as wealthy overseas investors kept their options open by renting, but more are now hesitating as Andy Burnham looks set to succeed Keir Starmer and the Labour Party moves further into its soft-left political comfort zone.”

There were 17% fewer deals above £5,000 per week in Prime Central London in the first six months of this year compared to 2025, Knight Frank data shows. 

There was an equivalent jump of 21% between 2024 and 2025.

Bill’s blog goes on to cite Tom Smith, head of super-prime lettings at Knight Frank, who says: “Renting became more popular among high-net-worth individuals last year due to non dom rule changes because it gave them flexibility. If we fast forward 12 months, they are now pressing pause due to the change in government and the wealth taxes rumoured to be included in the Budget.”