BLOGS

England's rental market enters a new legal era — but rents are still surging

When the Renters' Rights Act finally came into force in May 2026, it marked the most significant overhaul of England's private rented sector in a generation. No-fault Section 21 evictions are abolished. Landlords can only raise rents once a year, and only to the prevailing market rate. Estate agents are now legally prohibited from inviting or accepting bids above the advertised asking price. Tenants have a strengthened right to keep pets. And the Decent Homes Standard — long a fixture of the social housing sector — now applies to private rentals for the first time.

The political intent is clear: to rebalance a market that has, for years, tilted heavily in landlords' favour. But two months into the new regime, the data tells a complicated story. Far from cooling, rents are accelerating — and the rental market has rarely been tighter.

The numbers: asking rents surge at the point of reform

REalyse data tracking asking rents across England over the past 18 months paints a striking picture. Average asking rents hovered around £1,632–£1,700 per month in early 2025, climbed to a seasonal peak of £1,820 in July 2025, then eased back through the winter to £1,682 in January 2026.

What happened next is harder to explain away as seasonality alone. In May 2026 — the month the Act came into force — the average asking rent jumped to £1,948/month. By June 2026, it had reached £2,037/month: a new high for the entire 18-month period, and a 15.5% increase on June 2025's figure of £1,763.

That is not the softening some had expected to follow legislative change. The most credible explanation is a pre-reform repricing wave: landlords who anticipated that future rent increases would be constrained to annual market-rate adjustments appear to have reset their asking prices upward at the point of, or just ahead of, the Act's implementation — locking in higher baseline rents before the new rules fully embed.

Zoopla and Rightmove data published in early 2026 had already flagged that listed rents were climbing faster in the first quarter than in the same period a year earlier, with supply constraints continuing to outweigh the demand-side pressure the Act was designed to address.

A market with nowhere to breathe: days on market collapse

Rental asking prices are only one side of the equation. The speed at which properties are being snapped up tells an equally compelling story about supply and demand.

REalyse data shows that average days on market for English rental listings fell dramatically from 51.6 days in November 2025 to just 17.3 days in June 2026. In practical terms, a property advertised on a Monday is, on average, under offer by the end of the following week.

This extreme compression in time to let reflects a private rented sector where supply has structurally failed to keep up with demand. The number of active rental listings remains well below the pre-pandemic baseline, a pattern REalyse data has tracked consistently across most English regions. The buy-to-let sector faces ongoing headwinds — higher mortgage rates, stamp duty surcharges on investment purchases, and now the regulatory shift brought by the Act itself — all of which have discouraged new supply entering the market.

For tenants, a faster-letting market is not good news. It means less time to make decisions, fewer properties to compare, and — despite the new ban on bidding wars — informal pressure to move quickly and decisively.

The regional picture: a £1,700 gap between London and the Midlands

England's rental market is not one market — it is a collection of deeply divergent local economies, and the Renters' Rights Act will land very differently across them.

REalyse data for the past 12 months shows London sitting alone at the top of the regional ladder, with an average asking rent of £2,779/month across more than 174,000 listings. The South East follows at £1,674/month, with the East of England at £1,420/month. At the other end of the spectrum, the East Midlands averages just £1,062/month and the North East £1,064/month — a gap of over £1,700 per month compared with the capital.

This regional spread matters enormously for how the Act's rent increase provisions will play out in practice. In London, where asking rents are almost £2,800/month on average and year-on-year growth has been running at double-digit rates, annual market-rate increases will still represent substantial sums. In the East Midlands or Yorkshire, where rents are under £1,100/month, the practical impact of capping increases to once yearly may be felt more immediately — but the fundamental affordability challenge remains unchanged.

Property type breakdown

Flats dominate the English rental market, accounting for over 342,000 listings in the past 12 months — more than double the next largest category (terraced houses at 115,000). Average asking rents for flats stand at £1,704/month, broadly in line with semi-detached houses at £1,671. Detached rentals average £2,262/month but represent a much smaller share of the market.

For investors, REalyse yield data continues to show the strongest gross rental returns outside London — particularly across parts of the North West, West Midlands and Yorkshire — where purchase prices remain lower relative to achievable rents. The Act's new tenancy framework will, if anything, tend to reward landlords who can hold quality stock for longer tenancies rather than those relying on short-term churn enabled by Section 21.

What the Act means in practice: landlords, tenants, and investors

The abolition of Section 21 is the reform that has generated the most heat in the industry. Landlords can still recover possession under Section 8 grounds — which have been updated and expanded — including for genuine sale of a property, persistent rent arrears, or serious anti-social behaviour. But the quick-exit mechanism that many landlords used as a blunt instrument is gone.

Property industry bodies, including NRLA (National Residential Landlords Association), have warned that some landlords — particularly accidental landlords or those with single properties — may choose to exit the market rather than operate under the new framework. Any further reduction in available rental stock would, paradoxically, put more upward pressure on rents rather than less.

REalyse planning data suggests that new build-to-rent schemes in major urban centres continue to come through the pipeline, with institutional operators — who have longer investment horizons and are generally better placed to absorb regulatory change — accounting for an increasing share of new rental supply. But these schemes take years to deliver, and they are largely concentrated in London and a handful of regional cities; they do not address the supply gap in suburban and rural markets where the typical landlord is an individual with one or two properties.

The ban on rental bidding wars is welcome for tenants and should be enforceable in transparent, agent-managed transactions. The harder question is what happens to the informal pressure that plays out in viewings, reference checks, and 'first come, first served' decisions — none of which are easily legislated.

Outlook: the long game

The Renters' Rights Act is not a rent-control measure. It is a stability and security measure, designed to give tenants longer-term certainty in their homes and to eliminate the most exploitative landlord behaviours. On those terms, it deserves a fair assessment — and that assessment will take time.

Two months in, the data suggests the market absorbed the Act with a sharp upward repricing, not a structural correction. Rents are at 18-month highs, properties are letting faster than at any point in the past year, and the regional divide between London and the rest of England has not narrowed.

The test of the Act's real impact will come over the next 12 to 24 months: whether landlord exits slow or accelerate, whether new supply — institutional and individual — enters the market, and whether the reform that was meant to protect tenants ultimately creates conditions in which they can afford to rent at all.

For investors, developers, agents, and lenders, understanding those dynamics at a local level — postcode by postcode, property type by property type — will be the difference between informed decision-making and guesswork.