Rents stagnate as Renters’ Rights Act uncertainty bites

Rents across the UK showed signs of stagnation in December 2025, with average monthly rents slipping slightly amid growing uncertainty over the upcoming Renters’ Rights Act (RRA) due to take effect in May 2026. This cautious market behaviour reflects landlords’ concerns about how new legislation will impact rent increases, eviction processes, and tenant arrears, influencing rental pricing strategies going forward.

December rental figures indicate a cautious market

According to the latest HomeLet Rental Index, the average rent in the UK fell by 1.5% from November to £1,317 in December 2025. Despite this monthly dip, rents remain 2.6% higher than in December 2024, indicating modest annual growth. Outside Greater London, rents were slightly more stable, with an average of £1,124, representing a 0.8% monthly decrease but still 2.2% above the previous year’s level.

In Greater London, the average rent dropped by £68 (3.1%) from November to £2,129 in December, though it remained 2.8% higher than in December 2024. This regional variation highlights how London’s rental market is experiencing a sharper short-term adjustment compared to other parts of the UK.

Landlords’ concerns over the Renters’ Rights Act

Will Eastman, Head of Legal at HomeLet, described the December figures as indicative of a market “pausing for breath rather than moving decisively in either direction.” He noted signs of stagnation with small dips in some regions but no clear trend of sustained increases or decreases.

Eastman emphasised that much of the current uncertainty stems from the forthcoming Renters’ Rights Act. Landlords are trying to understand the full implications of the legislation, which introduces new rules around rent increases and bidding processes. While some landlords are considering higher rents on new tenancies to offset potential limitations, concerns about changes to eviction laws and the risk of tenant arrears are causing caution.

This uncertainty is significant for landlords and letting agents as it affects rental pricing strategies and risk management. The balance between setting rents that reflect market conditions and remaining affordable for tenants is delicate, especially with evolving legal frameworks impacting tenancy agreements and enforcement.

Regional rental trends: Northern Ireland and North East lead growth

Most UK regions experienced slight rental declines in December, with Greater London seeing the steepest monthly fall of 3.1%. However, Northern Ireland and the North East stood out with the strongest year-on-year rental growth, rising by 9.3% and 6.6% respectively. These areas may offer landlords more robust rental returns despite the broader market caution.

Conversely, the South East and North West were the only regions to record lower rents compared with December 2024, indicating some regional variation in rental market dynamics that landlords should monitor closely.

Implications for landlords and agents

The current rental market conditions highlight the importance for landlords and letting agents to stay informed about legislative changes and regional market trends. The Renters’ Rights Act will bring significant changes to tenancy management, rent setting, and eviction procedures, requiring landlords to adapt their practices accordingly.

Landlords should carefully consider rent levels on new tenancies, balancing the need to cover costs and potential arrears risks against maintaining affordability to attract reliable tenants. Letting agents will play a crucial role in advising landlords and managing tenant expectations during this period of adjustment.

Upcoming support for landlords

In response to the evolving rental landscape, The Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This initiative will feature verified and approved service providers selected to support landlords, tenants, and property management businesses. Legal, trades, insurance, financial, mortgage, tenant screening, and other service providers are invited to register their interest to become TLA service partners. This resource aims to assist landlords in navigating the challenges posed by legislative changes and market fluctuations.