BLOGS

The Renters' Rights Act marked the most significant overhaul of private renting legislation in a generation. Abolishing Section 21 "no-fault" evictions, introducing the Decent Homes Standard to the private sector, and creating the landlord ombudsman were headline measures designed to rebalance power between tenants and landlords. One year since Royal Assent, the data tells a nuanced story—one of structural supply constraints, regional variation, and a rental market learning to operate under new rules.

Supply contraction accelerates

REalyse market data shows a clear supply squeeze emerging across England's major cities. Month-on-month rental listing changes have averaged around -5% since early 2025, with particularly sharp drops in the spring and summer months when the Act's provisions began taking effect.

Average days on market have fallen dramatically—from around 45–50 days in mid-2025 to as low as 17–30 days in early 2026 across cities like Birmingham and Bristol. Properties are letting faster because there are fewer of them. For tenants, this intensifies competition; for landlords considering exit, it suggests those remaining enjoy stronger pricing power.

Industry bodies including the National Residential Landlords Association (NRLA) warned that regulatory uncertainty would prompt sales. The early evidence supports this: landlord survey data from 2025 indicated that one in five buy-to-let owners planned to reduce their portfolios, citing the Act's expanded tenant rights and the complexity of the new possession grounds.

Rents continue upward, but at a moderating pace

Asking rents have risen year-on-year, though the pace varies by region. REalyse data indicates an average annual increase of around 3% across major English regions—down from the double-digit surges seen in 2022–23 but still outpacing general inflation.

London remains the most expensive market, with average asking rents for flats at approximately £2,600 per month and terraced houses exceeding £3,400. By contrast, Yorkshire flats average around £920 per month while offering the strongest yield profile outside the capital.

Bristol has seen notable volatility, with asking rents fluctuating between £1,600 and £2,500 depending on property type and timing. The South West more broadly has recorded rent increases of 2–3% year-on-year—modest by recent standards but still above wage growth for many tenant households.

Regional yield divergence deepens

For investors, the Act's impact is most visible in yield compression—the gap between rental income growth and capital value appreciation. REalyse analysis of gross yields by region and property type reveals a clear north–south divide.

London shows consistent yield compression across all property types. Flat yields have fallen to around 4.7%, down approximately 0.38 percentage points year-on-year despite rents edging up 3%. Terraced, semi-detached, and detached properties tell the same story: returns are thinning as values rise faster than rents, and regulatory costs eat into margins.

The picture differs in the North. Yorkshire flats deliver average gross yields of nearly 7%, with yields expanding rather than contracting over the past year. The North West, despite some compression in the flat segment, still offers yields above 6% for terraced and semi-detached stock. The West Midlands and South West sit between these poles, with modest yield expansion across most property types.

For professional landlords and institutional investors, this divergence reinforces the case for regional diversification. London's premium rents come with premium prices and tighter margins; northern cities offer stronger income returns for those willing to manage across multiple geographies.

Landlord strategy shifts

Beyond the headline statistics, the Act is changing how landlords operate. The new possession grounds—replacing Section 21 with a reformed Section 8 process—require documented reasons for ending tenancies. Landlords report increased reliance on professional inventory services, more rigorous referencing, and greater selectivity in tenant screening.

Some smaller landlords have exited entirely, transferring stock to owner-occupiers or professional operators. Others have pivoted to short-term lets or serviced accommodation to avoid the Assured Shorthold Tenancy regime, though local authority licensing and planning rules increasingly constrain this route.

Build-to-rent (BTR) operators, by contrast, view the regulatory framework as broadly neutral or even positive. Purpose-built rental blocks already meet Decent Homes requirements, and institutional landlords have the compliance infrastructure to navigate ombudsman processes. REalyse planning data shows continued BTR pipeline growth in major cities, suggesting the sector sees opportunity in a market where amateur competition is retreating.

What comes next

The government has signalled further enforcement investment, with local authority resources earmarked for Decent Homes inspections and a new property portal due in late 2026. Landlord registration requirements will tighten data collection on stock condition, energy performance, and tenancy terms.

For tenants, the immediate outlook is mixed. Stronger security of tenure is real and valuable, but constrained supply and rising rents remain the dominant experience. Affordability pressures, particularly in London and the South East, show no sign of easing.

For landlords and investors, the strategic calculus has shifted. The Act raises operating costs and compliance complexity while reducing flexibility. Those who adapt—professionalising management, focusing on higher-yield regions, or scaling through BTR platforms—are best positioned to prosper. Those who do not may find the economics no longer work.

The Renters' Rights Act has not caused a market collapse, but it has accelerated structural changes already underway. England's rental market is becoming more institutional, more regulated, and more expensive. Understanding these shifts—through granular, real-time data—is essential for anyone seeking to navigate what comes next.