Demand for rental properties continues to outpace supply across the UK, as landlords exit the market amid concerns over the forthcoming Renters’ Rights Act. A recent report from Propertymark highlights the growing imbalance between tenant demand and available properties, signalling ongoing challenges for both renters and letting agents in 2026.

Landlords Leaving the Market

Propertymark’s Housing Insight report reveals a significant rise in tenant registrations, with an average of 87 registrations per member branch and seven applicants competing for each property. This surge in demand coincides with the Renters’ Rights Act set to become law on 1 May 2026, which appears to be influencing landlords’ confidence negatively.

A member agent from the South West commented on the impact, stating: “The Renters’ Rights Act is making more single property landlords leave the market. Social housing is non-existent, and the local authority is insisting that tenants do not move until they receive the bailiff letter. All compounding the reasons why private rented sector landlords have no confidence in the government.”

Similarly, an agent in Yorkshire described the market as fraught with “many frightened landlords and many more concerned tenants,” highlighting the difficulties tenants face securing rental homes in certain areas.

Rental Market Conditions

Despite the high demand, 63% of member agents reported rents remaining generally static, while 17% observed increases. This suggests some stability in rental prices, even as competition for properties intensifies.

Phil Spencer, founder of MoveiQ, emphasised the ongoing challenge for renters: “For renters, the challenge is still availability. With demand far outpacing supply in many areas, competition for rental homes remains intense, which can make securing a property stressful and time-consuming.”

He added that the market is still functioning with transactions continuing, advising renters and buyers to be well prepared financially and ready to act swiftly when suitable properties become available. Spencer also expressed hope that improvements in the wider economy during the year might ease pressure on household budgets and facilitate moving.

Supply Constraints and Market Outlook

Nathan Emerson, chief executive of Propertymark, confirmed that supply remains constrained despite a slight increase in stock levels. “Within the lettings market, demand continues to outstrip supply, with an average of seven applicants competing for each available property,” he said. Emerson noted that this imbalance is expected to remain a key challenge throughout 2026.

He described the market as stabilising rather than surging, with activity returning after seasonal slowdowns. However, he cautioned that the pace of recovery will depend heavily on inflation trends, interest rate decisions, and overall economic confidence in the coming months.

Sales Market Activity

In the sales sector, the average number of viewings per available property rose to 2.2, indicating increased buyer interest. Market appraisal volumes, which provide insight into future supply, averaged 21 appraisals per member branch.

Phil Spencer observed that buyers are approaching the market more cautiously: “What we are seeing in this data is that people haven’t stopped moving, but they are being more measured in their decisions.” He noted that while viewings have increased, stable buyer registrations suggest demand is returning, albeit with buyers taking longer to commit.

What this means for landlords

The current market conditions present a complex environment for landlords. While demand remains strong, the departure of some landlords due to regulatory concerns reduces available stock, intensifying competition among tenants. This dynamic may support rental prices but also places pressure on landlords to maintain high standards and responsiveness to tenant needs.

Landlords should be aware that economic factors such as inflation and interest rates will continue to influence market activity throughout 2026. Staying informed and prepared for potential regulatory changes will be essential to navigate the evolving private rented sector landscape effectively.

Source: Based on reporting from Propertymark

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