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The latest data from the Royal Institution of Chartered Surveyors (RICS) highlights ongoing pressures within the UK rental market, driven by a continued decline in available rental properties. This trend is coupled with rising tenant demand and increasing expectations for rent rises, signalling a challenging environment for landlords, letting agents and tenants alike as supply shortages persist.

Tenant Demand Increases Amid Shrinking Supply

According to RICS’s May 2026 housing market snapshot, tenant demand in the private rented sector has risen notably, with a net balance of +14% of survey respondents reporting an increase. This uptick reflects a growing competition for rental properties, which is occurring alongside a significant reduction in landlord instructions to let properties, recorded at a net balance of -28%. The imbalance between rising demand and falling supply is placing upward pressure on rents, with rent rise expectations reaching +36%, the highest level observed since May 2025.

This dynamic suggests that landlords who retain or add to their rental portfolios may benefit from stronger rental income prospects. However, the reduced number of new rental properties entering the market could exacerbate affordability challenges for tenants, particularly in high-demand regions.

Sales Market Remains Subdued with Prolonged Transaction Times

RICS’s survey also paints a cautious picture of the sales sector. The net balance for agreed sales remained at -37%, indicating that more respondents continue to observe a decline in sales activity rather than growth. Although this figure has stabilised rather than worsened, it underscores persistent market weakness. Additionally, the average time from listing to completion has extended to 21.5 weeks, marking the longest duration since RICS began collecting this data in 2017.

These extended transaction times may impact landlords considering property acquisitions or disposals, potentially delaying portfolio adjustments and affecting cash flow planning. The sluggish sales market could also influence rental demand, as prospective buyers may remain in the rental sector longer.

Regional Variations in House Price Trends

House price movements continue to show regional disparities. Nationally, prices have edged lower, with a net balance of -35% of respondents reporting price falls for the second consecutive month. The South East and East Anglia regions are experiencing more pronounced downward pressure on prices, while Northern Ireland stands out with sustained price growth.

These regional differences may affect landlords’ investment strategies, with some areas potentially offering more favourable conditions for capital appreciation or rental yield. Understanding local market trends remains essential for informed decision-making.

Market Sentiment and Inflationary Pressures

Looking ahead, RICS reports a cautious short-term sentiment among property professionals. Price expectations over the next three months remain weak, with a net balance of -45% anticipating further price declines. However, expectations for the year ahead have improved slightly, reaching a positive net balance of +6%, suggesting some optimism for market conditions stabilising or improving in the longer term.

RICS Head of Market Research and Analysis, Tarrant Parsons, notes that while some indicators show signs of stabilisation, the market remains fragile amid ongoing inflationary pressures. The consumer price index inflation rate fell to 2.8% in April 2026, offering temporary relief, but rising energy costs continue to pose challenges. The Bank of England has indicated that further interest rate increases cannot be ruled out, which may further influence market sentiment and activity.

What this means for landlords

For landlords, the current market conditions underscore the importance of carefully managing rental portfolios amid supply constraints and rising tenant demand. The increased expectation of rent rises may provide opportunities to improve rental income, but landlords should remain mindful of affordability and compliance with the Renters’ Rights Act and other relevant legislation.

Extended sales transaction times and subdued sales activity suggest that landlords planning to buy or sell properties should prepare for potential delays and factor these into their financial and operational planning. Regional variations in house price trends also highlight the need for landlords to stay informed about local market conditions to optimise investment decisions.

What TLA members should consider

• Review and update rent levels in line with market expectations while ensuring compliance with the Renters’ Rights Act and tenant communication requirements. See our RRA compliance resources for guidance.
• Monitor tenant demand and supply trends in your local area to identify opportunities for portfolio growth or adjustment.
• Plan for longer sales transaction periods if considering property acquisitions or disposals, allowing sufficient time for completion and financial arrangements.
• Stay informed about regional house price movements to assess potential risks and opportunities in your investment locations.
• Keep abreast of inflation and interest rate developments, as these may impact borrowing costs, tenant affordability and overall market sentiment.
• Utilise TLA resources such as the TLA Academy and legal support hub to stay updated on compliance and market best practices.

TLA Training Academy

The Landlord Association provides structured guidance, compliance education and practical support for landlords, letting agents and property professionals. Members can access training and resources designed to help them stay organised, informed and prepared.

Landlords can explore the Academy here: https://landlordassociation.org.uk/tla-academy/

Those looking to join and access member support can register here: https://landlordassociation.org.uk/get-started-with-the-landlord-association/

TLA update

The Landlord Association is continuing to expand its support, resources and partner network for landlords, tenants, agents and property professionals across the UK. Service providers interested in working with TLA can register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/