Supply constraints continue to push up rents
Tue 07 Apr 2026
In March, the latest figures from the ONS revealed that average UK monthly private rents increased by 3.5% to £1,374 in the twelve months to February 2026.
The same growth had been witnessed the previous month. Further growth is expected, despite, at the end of 2025, Rightmove predicting a 2% rise in average rents for 2026.
Recent figures published by the Royal Institution of Chartered Surveyors, found that one in five (20%) of those surveyed expect rents to rise over the coming three months. There are several reasons for this.
Landlords leaving the PRS
Landlords have been considering their options for some time since the Renters’ Rights Act was announced and ahead of it fully coming into force from May 1. For some that’s meant leaving the PRS. According to the English Private Landlord Survey, published in December, law changes and tax increases were blamed by more than three-quarters of property owners with medium or large businesses wanting to step back from the sector.
Those landlords choosing to leave the market as tenancies have ended has further impacted rental supply. Although some properties have been snapped up by larger landlords looking to expand their rental investment portfolios, others have become homes for first-time buyers instead.
At the end of 2025, the number of available homes to rent was 9% higher than in 2024 but still a third (33%) lower than ten years ago. Meanwhile, there were an average of ten enquiries per rental property during the year, according to Rightmove.
Nervousness over buying
Until recently, improved mortgage conditions had helped more renters purchase their own homes, with three-quarters of first-time buyers being former renters, according to Zoopla’s latest rental price index. This had led to a slowdown in rental price growth.
But, since then, the Iran war has impacted buyer confidence and affordability, particularly as mortgage rates have increased in response to the conflict. The threat to inflation and interest rates caused by the global instability means that some buyers will continue to rent instead until certainty and stability are reestablished, further increasing rental pressure.
Landlords adjusting rental prices to market value
Landlords have also been adjusting prices ahead of the new rental increase rules, which come into effect from May 1. From that point, rent review clauses in tenancy agreements will no longer be valid. Instead, landlords will need to issue a section 13 notice to tenants, with two months’ warning of the proposed increase.
The rent increase must be in line with the market rate and be evidenced. Tenants will be able to challenge unfair increases at a first-tier tribunal, which will decide if the new rent is acceptable or should be reduced.
In addition, rental bidding will also be banned. That means that landlords will no longer be able to allow competition between potential tenants to push up prices for them. Instead, the rent accepted must be the rent that was advertised. This has increased pressure on landlords to ensure their rents are set at the correct rate ahead of the act’s full implementation.
The continued trend of rental growth is good news for those staying in the market, however, proving that there are still gains to be made by landlords as the sector restructures in the wake of the Renters’ Rights Act.
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