For most of the last twenty years, buy-to-let in London worked something like this: you bought a 2-or-3-bedroom house in a decent borough, found an AST, charged 5 to 6 per cent gross yield, and accepted occasional voids and tenant turnover as the cost of doing business. Capital appreciation did most of the heavy lifting.
That model rested on three structural advantages that have now eroded:
- A 12-month fixed term gave you certainty of income.
- Section 21 gave you certainty of exit.
- Unlimited rent reviews gave you certainty of upside.
All three of those have gone. Fixed terms are abolished. Section 21 is gone. Rent rises are capped at once per year with a tribunal challenge route. The structural certainties of the AST regime — the things that made buy-to-let a low-effort, semi-passive asset — have been removed.
What replaces them is a regime that is still workable, but markedly more operationally intensive, more legally exposed, and more sensitive to tenant selection. The risk has not gone — it has just been redistributed.
How a finance desk would re-rate the asset
If you came at this fresh and asked an investment analyst to re-rate a London buy-to-let in 2026, they would look at three things: cash flow stability, downside risk, and operational drag.
Cash flow stability has weakened
Before May, a 12-month AST gave you 12 months of contractual rent. Now your tenant can leave on two months' notice at any point. The expected income series has gone from a step function to a discount-with-decay — every month carries some probability of vacancy.
Downside risk has widened
The 'tail risk' — what happens if a tenancy goes badly — is now longer and more expensive. Six to ten months of rent foregone plus £15,000 to £25,000 of legal costs on a contested possession is not a far-tail outcome any more. It is a realistic 5 to 10 per cent annual probability for any landlord with three or more properties.
Operational drag has increased
The compliance load — new notice forms, rent-rise procedures, pet-request workflow, anti-discrimination compliance, deposit handling, Information Sheet deadlines — has gone up. None of these are individually onerous. Together, they consume time and create paperwork-related civil-penalty exposure (up to £40,000).
The risk spectrum for a London landlord in 2026
Here is, broadly, where the main routes for letting a London property now sit on the risk curve:
Self-managed AST (now APT)
Highest upside, highest risk. You retain 100 per cent of the rent. You also retain 100 per cent of the void risk, eviction risk, compliance risk, and tenant-management workload. This is the right answer for landlords with one trusted tenancy and capacity to handle the paperwork.
High-street letting agent (commission model)
Reduces operational workload, retains all asset-level risk with you. You pay 10 to 15 per cent of monthly rent for tenant find and management. Void risk, eviction risk, and rent arrears risk all still sit with you. The agent's incentive structure — paid on transactions — does not align with long-term asset performance.
Percentage-based property management with risk-sharing
What we do for stabilised, performing properties. Lower headline fee than commission letting, but the manager has skin in the long-term performance of the asset.
Guaranteed rent / company let
You receive a fixed monthly rent for one to two years from the operator (us), regardless of whether the property is occupied. We are the tenant on paper. We take the void risk, the eviction risk, the legal exposure, and the operational management.
The trade-off: your headline rent is typically 10 to 20 per cent below the open-market rent. The benefit: that rent is contractually guaranteed for the term, with no voids, no tenant disputes, no court risk, and no compliance load.
When does the trade-off make sense?
Guaranteed rent is not always the right answer. For a landlord with a high-yielding property, a strong tenant of three years' standing, and the time to manage it, self-management still wins on a pure-yield basis.
It tends to be the right answer when one or more of these are true:
- You have multiple properties and operational time is scarce.
- You are not based in London, or not based in the UK.
- You have had a bad tenancy and you do not want to repeat the experience.
- Your property has been sitting void or has had high turnover.
- You value income predictability more than absolute yield.
- You are approaching retirement and want the asset to behave like an income product rather than a job.
- You are concerned about your exposure to the Renters' Rights Act compliance regime.
What Morgan Prescott does differently
Most guaranteed-rent operators in London come from a letting-agency background. They run the model the way a letting agent runs an agency — volume-driven, commission-minded, tenant-quality variable.
We come from finance. We model each property like a fixed-income asset: we look at the achievable cash yield, the void risk profile, the local council demand pipeline, and the maintenance trajectory. We will not lease a property where the numbers do not work — and we will tell you straight if your asking expectation is unrealistic.
We currently manage rentals for 140+ tenants across West London, with a focus on Ealing, Hounslow, Fulham, Putney, and the wider corridor out to Heathrow. Our partnerships with local councils on temporary accommodation give us a structural advantage on tenant pipeline that pure letting-agent operators do not have.
If you would like a frank conversation about where your property sits on the risk curve, and whether guaranteed rent is the right answer for it, book a free 48-hour valuation. We will tell you honestly if it is not.