BLOGS

England's rental sector after the Renters' Rights Act: stronger rights, stubborn rents

Ten weeks have passed since the most sweeping reform of England's private rented sector in nearly four decades took effect. On 1 May 2026, the Renters' Rights Act 2025 — which received Royal Assent on 27 October 2025 — reshaped the legal foundation of renting overnight. Section 21 "no-fault" evictions were abolished. Every assured shorthold tenancy in England automatically converted to an open-ended periodic tenancy. Landlords who advertise a property can no longer accept bids above the asking rent, nor demand more than one month's rent upfront.

For England's estimated 11 million private renters, these reforms represent genuine, tangible gains in security and bargaining power. For the sector's 2.3 million landlords, they represent the most significant operational reset since the Housing Act 1988.

But one question dominates the conversation in July 2026: are the reforms translating into relief for tenants on the ground — particularly on rent?

The early answer, backed by the data, is complicated.

What actually changed on 1 May 2026

The Act's first phase delivered three headline changes that affect every private tenancy in England immediately.

The end of Section 21

Section 21 — the mechanism that allowed landlords to evict tenants without stating a reason — is gone. Landlords must now rely on reformed Section 8 grounds to recover possession. These grounds have been expanded and strengthened by the Act, and include: serious rent arrears of three or more months (Ground 8); a landlord's genuine intention to sell the property (new Ground 1A); or a landlord or close family member intending to move in (Ground 1), subject to a 12-month protected period from the tenancy's start and a four-month notice requirement.

The evidential bar is higher. Courts will require documentation, and procedural errors can invalidate possession claims entirely. For portfolio landlords and letting agents operating professionally, this is manageable — but it raises the stakes for less organised operators.

Rolling periodic tenancies

Every AST in England converted to an Assured Periodic Tenancy (APT) on 1 May 2026. Fixed-term contracts no longer exist in the private rented sector. Tenants can leave with two months' notice from day one. Landlords lose the natural break points that fixed terms provided, and must now plan for longer, indefinite tenancy durations.

The bidding war ban

Landlords and agents must advertise a clear asking rent and cannot invite or accept higher offers. Advance payments are capped at one month's rent. This targets a practice that had become endemic in London and other high-demand cities, where competitive rental markets routinely saw prospective tenants submitting "best and final" rent offers well above the listed price — a dynamic that compressed affordability further and rewarded those with the deepest pockets.

What the data says: rents are still rising

The case for optimism — that tighter regulation would take the heat out of rent inflation — has not yet been borne out in the numbers.

REalyse data covering the 12 months to July 2026 shows that asking rents across England's private rented sector remain firmly in positive year-on-year territory across every major property type.

• Detached houses: average asking rent of £2,261/month, up 3.2% year-on-year — the strongest growth of any property type

• Terraced houses: £1,735/month, up 2.4% year-on-year

• Flats: £1,703/month, up 2.4% year-on-year — notable given that flats account for the vast majority of rental listings in England (over 333,000 active listings in the dataset)

• Semi-detached houses: £1,671/month, up 1.2% year-on-year — the only property type showing a meaningful deceleration

The bidding war ban may be holding back some of the most extreme rent spikes in ultra-competitive local markets. But the underlying trajectory remains upward, driven by structural imbalances that legislation alone cannot fix.

Average days on market tell a similar story: rental listings are being absorbed in around 38–44 days depending on property type, reflecting continued, robust tenant demand rather than a market in retreat.

The supply squeeze: landlord exits accelerate

The principal reason rents are not falling is that supply is contracting at the same time that demand remains structurally elevated.

Research from specialist lender Pepper Money estimates that approximately 220,000 rental homes — around 5% of England's entire private rented sector — could leave the market by the end of 2026, with more than 65,000 of those exits attributed directly to the Renters' Rights Act reforms. Data from property analytics firm TwentyCi adds detail: the share of homes coming to market that were previously rented fell from 22.5% in Q1 2025 to 12.4% in Q1 2026 — a 45% year-on-year decline. London saw the sharpest drop, down 51%, and crucially, only 11% of former rental homes sold in the capital during mid-2025 were subsequently re-let, suggesting that stock leaving the private rented sector is not returning.

Rental listing volumes have fallen across every UK region, with declines ranging from 5% to 26% year-on-year. This is the paradox at the heart of the reform: measures designed to protect tenants are, in the short term, reducing the pool of available homes and sustaining the upward pressure on rents that those tenants most need to see ease.

REalyse development pipeline data adds important longer-term context. Residential planning permissions in England's highest-demand cities remain weighted towards owner-occupier product rather than purpose-built rental accommodation. Build-to-rent completions are growing, but not yet at the scale required to offset private landlord exits — particularly in the sub-£2,000/month price band where most renting households sit.

A note on Scotland, Wales and Northern Ireland

England's reforms are the most dramatic, but they are not occurring in isolation. Scotland introduced rent control measures under the Cost of Living (Tenant Protection) (Scotland) Act ahead of England, with rental listing volumes down more than 25% year-on-year — a cautionary signal for England about the supply consequences of regulatory intervention. Wales operates under the Renting Homes (Wales) Act 2016, which already abolished equivalent no-fault eviction mechanisms and converted tenancies to occupation contracts. Northern Ireland's private rented sector has its own legislative framework and is not subject to the Renters' Rights Act.

What comes next: Phase 2 and beyond

The Act is not yet fully in force. Phase 2, expected in late 2026, will mandate registration on a new Private Rented Sector Database and membership of a PRS Ombudsman scheme — with landlords funding both. Fines for non-compliance range from £7,000 for initial breaches to £40,000 for repeated or serious violations.

Looking further ahead, all private rental properties in England must achieve a minimum EPC C rating by 2030 to be lawfully let, and the Decent Homes Standard will extend to the private sector in the 2035–2037 window. These are significant future capital expenditure obligations, particularly for landlords holding older or energy-inefficient stock.

For investors and portfolio operators, the key variables to track are: the evolution of First-tier Tribunal case law on rent challenges, as tenants begin testing the new statutory mechanisms; the pace of PRS Database rollout and its enforcement implications; and whether build-to-rent pipeline supply can genuinely substitute for departing private landlords at scale in regional markets.

Outlook: a market in managed transition

The Renters' Rights Act has not triggered a collapse of England's private rented sector. But it has accelerated a structural reshaping that was already underway — consolidating the market around better-capitalised, professionally managed landlords while smaller, less compliant operators exit.

For tenants, the reforms deliver real and meaningful improvements in security. The fear of receiving a Section 21 notice mid-tenancy is gone. Rent increases are now capped at one per year and must follow a formal statutory process. Bidding wars are, in theory, over.

But with asking rents still running around 2.4% above year-ago levels — and supply continuing to tighten — the affordability challenge that underpins the rental crisis in England has not been resolved by the Renters' Rights Act. That will require what the Act does not provide: a significant uplift in the supply of homes available to rent.

The sector is in managed transition. The next six months, as Phase 2 rolls out and the courts absorb the first wave of Section 8 possession claims under the new grounds, will be decisive in determining whether that transition stabilises on terms that work for both landlords and tenants — or deepens the supply shortfall that is keeping rents elevated despite the most ambitious pro-tenant legislation in a generation.