Renters' Rights Act Triggers Fresh Round of Rent Rises

Landlords across England are raising asking rents in direct response to the Renters' Rights Act, according to new data highlighted by PropertyWire, as the sector recalibrates for a regulatory environment that curtails no-fault evictions, restricts rent review frequency and hands tenants greater power to challenge above-market increases. The move confirms what many analysts predicted throughout the bill's passage: rather than absorbing the cost of reduced flexibility and increased compliance risk, landlords are building a premium into asking rents before the legislation fully beds in.

The significance for UK property investors extends well beyond a single legislative cycle. This is the most consequential shift in the private rented sector since the Housing Act 1988 established assured shorthold tenancies, and it fundamentally alters the risk calculus for buy-to-let ownership. Landlords have historically priced in the ability to recover possession relatively quickly via Section 21; with that mechanism abolished, many are treating the resulting uncertainty exactly as they would any other risk premium — by charging for it upfront. Early industry estimates suggest asking rents on new lets have risen by between 3% and 6% above where they would otherwise have settled this quarter, on top of average UK rental growth already running at around 5% year-on-year according to ONS and Zoopla tracking.

Regional divergence will be pronounced. In London and Surrey, where average rents already exceed £2,100 and £1,500 a month respectively, landlords have more room to absorb margin pressure but also more to lose from prolonged voids, so rent increases in these markets are likely to be more measured and targeted at prime stock. By contrast, in Manchester, Leeds and Birmingham — cities that have driven much of the UK's rental growth over the past three years on the back of strong graduate retention and inward investment — landlords with tighter yields are more likely to pass costs through aggressively, since tenant demand remains robust and vacancy periods are typically shorter. Liverpool and Newcastle, where yields have historically outperformed the South East precisely because purchase prices are lower, may see the sharpest proportional rent increases as landlords there operate on thinner absolute margins and have less capacity to absorb compliance costs or extended void risk.

The first-time buyer market sits at an uncomfortable intersection of this shift. Rising rents erode the capacity of aspiring homeowners to save for deposits, precisely at a time when mortgage rates remain elevated relative to the ultra-low environment of the late 2010s. Every percentage point added to average rent effectively lengthens the time horizon for first-time purchase by months, not weeks, particularly in high-cost regions such as London and the South East. Paradoxically, this legislation designed to protect tenants may extend the very tenancy periods it aims to make more secure, simply because it is delaying the transition into ownership for a meaningful cohort of renters.

For buy-to-let landlords weighing their next move, the calculus now demands greater scrutiny of total regulatory exposure rather than gross yield alone. Portfolio landlords with older, less energy-efficient stock face a compounding problem: EPC upgrade requirements arriving later this decade sit alongside the loss of Section 21 and tighter rent review rules, making some smaller-scale landlords reconsider whether continued ownership justifies the administrative burden. Anecdotal evidence from letting agents suggests a modest but real uptick in landlords testing the sales market, particularly among those with one or two properties bought a decade or more ago and now sitting on substantial unrealised capital gains. That dynamic could, over the medium term, marginally ease supply-side rental pressure in some regional markets even as it reduces overall rental stock — a genuinely ambiguous outcome for tenants.

Commercial and institutional investors, by contrast, are likely to view this moment as an opportunity rather than a threat. Build-to-rent operators, who typically manage larger, professionally run portfolios with in-house compliance teams, are far better positioned to absorb the new regulatory framework than individual landlords letting a handful of properties. Expect increased institutional capital deployment into purpose-built rental schemes in Manchester, Birmingham and Leeds over the next 12 months, as these operators use their scale advantage to capture market share from smaller landlords exiting the sector. This professionalisation trend, already underway before the Renters' Rights Act, is likely to accelerate materially as a direct consequence of the new rules.

Looking ahead, the next two to three quarters will be decisive in establishing whether current rent increases represent a one-off adjustment or the start of a sustained repricing of the entire private rented sector. Given continuing constraints on housing supply and net migration figures that remain historically elevated despite recent policy tightening, underlying demand for rental accommodation shows no sign of softening. Investors should expect rental growth to remain above long-run averages of 2–3% well into 2026, with the greatest upward pressure concentrated in regional cities where yield-conscious landlords have the least room to absorb new compliance costs without passing them directly to tenants.