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The law has changed. The pressure hasn't.

When the Renters' Rights Act received Royal Assent in early 2025, it marked the most significant overhaul of England's private rented sector in a generation. The abolition of Section 21 "no-fault" evictions, the shift to periodic tenancies, the ban on rental bidding wars, and new protections around rent increases were all broadly welcomed by tenant groups — and rightly so.

But a year on, the rental market is telling a more complicated story. Despite the Act's intention to stabilise the market for tenants, structural forces set in motion well before the legislation — and accelerated by landlord uncertainty around it — continue to push rents upward across most of England.

Understanding why requires looking beyond the headlines and into the data.

Landlord exit: a slow bleed that compounds supply pressure

The private rented sector had already been contracting before the Act's passage. The combination of mortgage rate rises from 2022 onwards, the phased removal of mortgage interest relief under Section 24, and stamp duty surcharges on additional properties had been quietly eroding landlord margins for years. The Renters' Rights Act added a further layer of uncertainty — particularly for smaller landlords, who make up the majority of PRS stock.

ONS and NRLA survey data have consistently shown a net outflow of private landlords from the market since 2022. Many are not selling to other landlords or build-to-rent operators — they are selling to owner-occupiers, permanently removing those units from the rental pool.

REalyse data shows this dynamic playing out at a postcode level: in a number of high-demand urban districts, the ratio of active rental listings to total private rented stock has tightened materially over the past 24 months. In some London boroughs, available rental supply per 1,000 rental households is tracking at multi-year lows.

Nationally, Rightmove and Zoopla have both reported that the number of available rental properties per estate agency branch remains well below pre-2022 norms — in some regions, down by 30–40% from the levels seen in 2019.

Demand shows no sign of easing

On the other side of the ledger, tenant demand is holding firm. Affordability pressures in the owner-occupier market — with average house prices still elevated relative to wages and mortgage rates only gradually declining — mean that many would-be buyers are remaining renters for longer.

Graduate and young professional household formation continues at pace in major cities, and net migration into England's urban centres, while politically contested, has sustained occupier demand in markets such as Manchester, Birmingham, Bristol and London.

REalyse rental market data for the 12 months to Q1 2026 points to average void periods in high-demand postcode districts remaining very short — often below two weeks — indicating that landlords face little incentive to reduce asking rents, even as affordability is increasingly stretched for tenants.

The ONS Private Rental Index, which tracks achieved rents rather than asking prices, continued to show annual growth in England running above general CPI inflation through much of 2025, though the pace of growth has moderated from the sharp double-digit spikes seen in 2022–23. The moderation, however, should not be mistaken for relief: rents are still rising in absolute terms, from an already elevated base.

Scotland as a cautionary precedent

England is not operating in a policy vacuum. Scotland provides a live experiment in what stronger tenant protection looks like — and the early results are instructive.

Scotland's Cost of Living (Tenant Protection) Act 2022 introduced emergency rent caps and further restricted evictions. While motivated by the cost-of-living crisis, the intervention had visible supply-side consequences: Scottish landlord association data showed accelerated deregistrations from the private rented sector, and agents in cities like Edinburgh and Glasgow reported sharp falls in available rental stock within months of the cap's introduction.

The result — a squeeze in supply that pushed up asking rents for newly listed properties, even as capped rents held for existing tenants — is a pattern that English market observers are now watching carefully. If landlords price new lets aggressively to compensate for reduced flexibility, the ban on bidding wars under the Renters' Rights Act may prove less effective at containing rent levels than legislators hoped.

What the Act changes — and what it doesn't

It is worth being clear about what the Renters' Rights Act does and does not do in terms of rent.

The Act does not introduce rent controls. Landlords retain the right to increase rent once per year through the Section 13 process. Tenants can challenge increases they consider above market at the First-tier Tribunal, but the tribunal's benchmark is market rent — meaning there is no regulatory ceiling below prevailing market rates.

The practical effect of this is that rent levels themselves remain a function of supply and demand. The Act changes the rules of tenancy; it does not directly intervene in pricing. Where supply is constrained and demand is robust, rents will continue to rise.

What the Act may do — and this is where the data will prove revealing over the next 12–24 months — is shift the distribution of rent inflation. Properties coming to market fresh will likely command higher asking rents as landlords price in the reduced flexibility they now have around tenancy management. Longer-term, sitting tenants with good track records may find landlords more willing to accept modest increases in exchange for retention, given that eviction is now more process-heavy under the new grounds-based system.

REalyse yield tracking suggests that gross rental yields in many urban markets remain attractive relative to the cost of finance — which may gradually attract more institutional and professional landlord capital into the sector, partially offsetting the exit of smaller private landlords. Build-to-rent pipeline data shows continued activity in major regional cities, though the volume of completions remains insufficient to meaningfully close the supply gap in the near term.

Outlook: structural pressure, gradually moderating pace

The consensus among market analysts is that rental inflation in England will moderate over the next two to three years, but from a high base and without a sharp reversal. The structural imbalance between supply and demand — rooted in years of under-investment in housing delivery, a shrinking small landlord base, and a planning system that constrains new supply — is not something the Renters' Rights Act was designed to fix.

What the Act does is reframe the relationship between landlords and tenants in ways that are, on balance, fairer and more stable. That is a legitimate policy objective. But fairness of process does not automatically translate into affordability of rent — and investors, lenders, developers and agents would be wise to track the data closely as the market adjusts.

For those active in the private rented sector, whether as landlords assessing yield sustainability, lenders stress-testing rental income assumptions, or developers scoping new BTR schemes, understanding rental market dynamics at a granular postcode level has never been more important.