BLOGS

England's rental market enters a new era

After years of false starts and political delays, the Renters' Rights Act has arrived — and its effects are already rippling through England's private rented sector. The abolition of Section 21 "no-fault" evictions, the end of fixed-term assured shorthold tenancies, and a new regime governing rent increases have collectively shifted the balance of power between landlords and tenants in ways that are fundamentally changing investment calculus across every region.

For some, the reforms represent a long-overdue correction in a sector where tenants had few protections and little security. For others — particularly smaller landlords managing one or two properties — they represent an operational burden that has tipped the economics of buy-to-let beyond acceptable risk thresholds.

The result is a market in transition: tighter supply, elevated rents, and a growing polarisation between institutional and individual landlords.

Section 21 abolished: the supply shock that was hiding in plain sight

The removal of Section 21 — the mechanism that allowed landlords to reclaim a property without providing a reason — was flagged as the centrepiece of reform long before the Act came into force. What it has triggered, however, is a supply contraction that began well before the legislation landed.

Throughout 2024 and 2025, REalyse data tracked a steady reduction in rental listings in key English markets as landlords sold up ahead of the deadline. In areas such as the South East and East of England, where property values are high and yields already compressed, the numbers selling out of the sector outpaced new entrants by a widening margin.

The irony is stark: legislation designed to help renters has, in the short term, reduced the supply of rental homes available to them. With fewer properties to let, competition among tenants has intensified — and asking rents have followed.

REalyse data for the last 12 months shows average asking rents across England at around £1,694 per month for flats, £1,774 for terraced houses, and £2,420 for detached homes — all sitting on average days-on-market of just 32–35 days, suggesting demand continues to absorb new supply quickly despite affordability pressures.

Where yields still stack up — and where they don't

For investors who have remained in the sector or are actively looking to enter, the regional yield picture has become the central question. Not all of England faces the same dynamics, and REalyse data underscores a clear North–South divide in the income return available.

The North East continues to lead on gross rental yield, with REalyse data showing an average of approximately 7.4% — driven by relatively low average sold prices (around £183k) against average monthly rents approaching £980. Yorkshire and the North West are not far behind at 6.5% and 6.3% respectively, making the Northern regions the most arithmetically compelling for income-focused buy-to-let investors.

London, by contrast, sits at the opposite end of the yield spectrum at around 4.75% gross — with average sold prices near £595k substantially diluting the income return from average monthly rents of £2,736. The capital's case for buy-to-let has long rested on capital appreciation rather than income yield, and the Act's constraints on rent increases (limited to once per year, challengeable at the First-tier Tribunal) make that trade-off more pronounced.

The Midlands, South East, East of England and South West sit in the mid-range between 5.7% and 6.1%, offering a middle ground that still provides reasonable returns — but where margin compression from rising management costs and regulatory compliance will be felt most acutely by leveraged landlords.

The new rent rules: a one-way ratchet?

Under the Act, landlords can increase rent only once in any 12-month period and must do so via a prescribed Section 13 notice. Tenants retain the right to refer any proposed increase to the First-tier Tribunal, which can approve, reduce — or, crucially, not increase the rent beyond what the landlord originally proposed.

In practice, this has created a one-way dynamic. Landlords are acutely aware that going to tribunal risks a rent being frozen or held below market level. Many are responding by pricing new tenancies more aggressively from the outset, embedding a larger buffer against future uncertainty into the initial asking rent.

This front-loading of rent is visible in the data. Average asking rents across England have remained elevated relative to achieved rents, with landlords reluctant to discount — both because demand allows it, and because they cannot easily recoup ground lost in the first year of a tenancy.

Agents, meanwhile, are having to re-educate landlords on what "market rent" now means in a tribunal context — and how to evidence it. This is where access to robust, time-stamped comparable data becomes critical. A landlord defending or proposing a Section 13 rent increase needs to demonstrate what comparable properties are actually achieving — not simply what they are asking. REalyse-style comparables and achieved rent data, filtered by postcode district, property type and bedroom count, are increasingly being used for exactly this purpose.

Institutional landlords and BTR: the quiet winners

If small landlords are exiting, someone is taking their place — and build-to-rent (BTR) operators are the most visible beneficiaries. Institutional landlords, structured for compliance from day one, are largely untroubled by reforms that were designed with the informal, fragmented private sector in mind.

BTR schemes already operate without fixed-term tenancies in practice. They have professional management structures, dedicated legal teams and the operational scale to absorb tribunal processes, ombudsman referrals and the new Private Rented Sector Database requirements without meaningful disruption.

REalyse planning data shows that the BTR pipeline across England remains active, with permissions and applications concentrated in Greater Manchester, West Yorkshire, the West Midlands and — to a lesser extent — outer London boroughs. These are precisely the markets where individual landlord exit is creating a gap in supply that institutional product is positioned to fill.

For investors and developers tracking the BTR opportunity, the key metrics to watch are absorption rates (how quickly new units let), achieved rent relative to asking, and the discount to asking price — all of which signal whether new supply is arriving into a healthy market or beginning to saturate.

What agents and landlords should do now

The reforms are no longer coming — they are here. The market's early response has been a mixture of confusion, compliance scrambling and strategic repositioning.

For agents, the most urgent task is operational: updating tenancy documentation, understanding the new grounds for possession under the reformed Section 8, and building processes for the Ombudsman and PRS Database requirements. Those who can offer landlords genuine compliance confidence — backed by market data to support rent-setting decisions — will retain books that others lose.

For landlords, the calculus is now more explicitly about yield versus risk-adjusted return. A property yielding 5% with a professionally managed, stable tenancy in a liquid market is a fundamentally different asset from one yielding 5% in a low-liquidity market with high void risk and complex possession dynamics. Location, asset quality and management efficiency have never mattered more.

For investors entering or scaling in the sector, REalyse data increasingly points toward the Northern regions — North East, Yorkshire, North West — as the areas where income returns remain robust enough to absorb the new compliance cost layer and still deliver credible returns.

Conclusion: a market resetting, not collapsing

England's private rented sector is not in freefall — but it is being repriced. The Renters' Rights Act has accelerated a structural shift that was already underway: away from fragmented, informal individual landlordism and toward a more professionalised, institutionalised model.

Rents remain high. Demand remains strong. But the rules of engagement have changed, and the investors, landlords and agents who will thrive are those who treat the new regime not as a threat to work around, but as a new operating environment to master — with the right data at their fingertips.