Rents are still rising, and the numbers behind it
The Office for National Statistics' Index of Private Housing Rental Prices recorded annual rent growth of around 5% across the UK through 2025, and the early indications for 2026 point to continued increases, albeit at a slower pace than the double-digit peaks of 2022 and 2023. Rightmove's Rental Price Tracker, which measures asking rents for newly advertised properties, has consistently shown asking rents outside London at or near record highs, while Zoopla's rental index reports that advertised rents are still outpacing earnings growth in most regions.
For landlords, the headline matters less than the mechanism. Rent growth in 2026 is being driven by a persistent imbalance between the number of households looking for homes and the number of homes available to rent. Rightmove has repeatedly noted that the number of available rental listings remains well below pre-pandemic levels, even as demand from prospective tenants runs ahead of what the market can absorb. When several households compete for each available property, landlords can achieve asking rent or above, and void periods shorten.
Why supply keeps falling short
Three forces are holding back supply, and none of them looks likely to reverse quickly.
- Landlord exits and reduced re-investment. Changes to stamp duty on additional properties, higher mortgage costs following the Bank of England's rate rises, and the phasing out of tax relief on finance costs under Section 24 have pushed some landlords to sell. Others have held properties but stopped adding to their portfolios.
- The Renters' Rights Act. The abolition of Section 21 and the move to open-ended tenancies have made some smaller landlords reassess whether they want to remain in the market at all. Compliance obligations around property standards and rent increases under the new regime add to the administrative load.
- Competition from other sectors. Build-to-rent developments and the conversion of rental stock into short-term lets in tourist areas, particularly coastal Wales, Cornwall and parts of Scotland, have removed long-term rental homes from the market.
Housebuilding has not filled the gap. Net additional dwellings in England have run below the government's own targets for years, and the planning reforms announced in 2024 and 2025 will take several years to produce completed homes. In the short term, the supply of rental properties can only fall or stay flat.
Regional trends: where rents are rising fastest
The ONS data shows a consistent pattern: rents are rising fastest outside London, and London itself has returned to solid growth after a flat period in 2023.
London
After a period of stagnation in 2023 when tenants pushed back on high asking rents, London's rental market re-accelerated. Rightmove's tracker has shown average asking rents in the capital above £2,600 per calendar month, with annual growth in the region of 5-7%. Inner London demand has been bolstered by the return of international students and corporate relocations, while outer London has absorbed tenants priced out of the centre.
The North West, Yorkshire and Scotland
The North West has posted some of the strongest annual rent growth in the ONS series, with cities such as Manchester, Liverpool and Leeds combining strong tenant demand with comparatively low entry prices. Scotland's rent cap under the Cost of Living (Tenant Protection) Act and its successor arrangements under the Housing (Scotland) Act have moderated headline growth there, though landlords report pressure building beneath the cap as costs rise.
Wales and the South West
Wales has seen sustained growth driven by the same supply dynamics as England, compounded in tourist areas by the shift of stock into short-term holiday lets. The South West, particularly Bristol, Exeter and the coastal towns, remains one of the tightest markets in the country, with Rightmove reporting some of the highest ratios of enquiries per listing.
Rental yields in 2026: the landlord's real picture
Gross rental yields have improved in much of the country because house price growth has cooled while rents have continued to climb. Zoopla and Rightmove data both point to gross yields of 6-7% being achievable in parts of the North West, Yorkshire and the North East, compared with 4-5% in London and much of the South East.
Gross yield is only half the calculation. Landlords in 2026 face higher mortgage costs than those who refinanced before 2022, and the Section 24 restriction on finance cost relief means higher-rate taxpayers bear the full brunt of interest payments. A 6.5% gross yield in Salford can translate into a thinner net return than the headline suggests once mortgage, maintenance, compliance and void costs are counted. Landlords should model net yield and cash flow at current swap-rate expectations for base rate, not at the rates they enjoyed three years ago.
The yield environment explains why portfolio landlords are still buying. Those with equity and access to competitive finance are acquiring in high-yield northern postcodes, while smaller landlords with mortgaged properties in low-yield areas are the group most likely to sell.
What the Renters' Rights Act changes for rent strategy
The Renters' Rights Act 2025 abolished Section 21 and replaced fixed-term assured shorthold tenancies with periodic tenancies. For rent-setting, two provisions matter most.
First, landlords can no longer use a Section 21 notice to secure a rent increase. Increases must be served using the Section 13 process, and tenants can refer an increase to the First-tier Tribunal if they believe it exceeds market levels. The Tribunal can set the rent at market rate, and in limited circumstances where a landlord has sought to circumvent the rules, below it. Landlords should therefore document comparable evidence, Rightmove and Zoopla listings for similar properties in the immediate area, before serving any notice.
Second, the ban on rental bidding means agents and landlords must advertise a single asking rent and cannot invite offers above it. This changes how the tightest markets work: where a property would previously have gone to the highest bidder, landlords now need a defensible asking rent from day one, with competition now showing in speed of let and tenant quality rather than price.
Practical steps for landlords and agents in 2026
- Review rents against current comparables, not last year's figures. With the ONS index showing rents rising faster than many landlords' own increases, sitting tenants are often paying below market. A Section 13 increase backed by evidence is now the only route, so build the evidence file early.
- Protect deposits and document condition. Under the new tenancy regime, disputes over deposits and property condition are more likely to end at the Tribunal. A time-stamped, detailed inventory at check-in and check-out is the single most useful document in any dispute. Many managing agents now use an AI-powered inventory software to produce consistent, date-stamped reports with photographic evidence across a whole portfolio.
- Check EPC compliance ahead of the deadline. The government has signalled that minimum energy efficiency standards will rise, with consultation proposals for an EPC band C requirement for rented homes. Properties currently at band D or E should be assessed now, because retrofit work (loft insulation, heating upgrades, glazing) takes months to arrange and trades are in short supply.
- Re-underwrite mortgages before the fixed period ends. Landlords coming off sub-2% fixes in 2026 should model the new payment against achievable rent and decide early whether to refinance, sell or restructure, rather than drifting onto a standard variable rate.
- Keep records of compliance. Gas safety, electrical installation condition reports, smoke and carbon monoxide alarms, and deposit protection are all grounds on which a landlord can lose the right to regain possession under the new grounds system. A compliance calendar, reviewed quarterly, is cheap insurance.
What agents should be telling their landlords
Letting agents are fielding two questions repeatedly: should I sell, and can I raise the rent? The honest answer to the first is that selling into a market where house prices have flattened means realising a lower price than the same property would have fetched in 2022, while the rental income it could generate has never been higher. For many landlords, holding and re-underwriting is the better financial outcome, provided the property meets upcoming standards.
On rent increases, agents add value by preparing the comparable evidence pack before the landlord asks. Under the Renters' Rights Act, an increase that cannot be justified with evidence risks a Tribunal referral, and a Tribunal-determined rent applies from the date the landlord's notice was served. Agents who systematise evidence-gathering, using consistent property records and photography, will protect both their landlords and their own reputations.
The outlook for the rest of 2026
The ONS and Rightmove both expect rent growth to continue through 2026 at a moderate pace, with annual increases in the 3-5% range for much of the country. The supply shortfall that underpins those figures, fewer listings, fewer new builds, and landlord exits concentrated among smaller mortgaged owners, is structural. Rents rising faster than wages will eventually test tenant affordability, and Zoopla has noted that affordability ceilings are already capping growth in the most expensive cities. For landlords with well-maintained, compliant properties in high-demand locations, 2026 offers strong income and short voids. The work that protects that position, evidence-backed rent reviews, thorough inventories and early compliance planning, is administrative, and it will decide whether a tenancy turns out profitable or problematic.
See the difference for yourself
If you manage a portfolio or a lettings book, the administrative load described above lands on your inventory and compliance records. Our property inventory CRM produces time-stamped check-ins, check-outs and mid-term inspections with photographic evidence, keeps compliance documents organised per property, and gives your team a single source of truth for every tenancy. Book a demo today and see how much time a well-structured inventory process returns to your week.