Rents reach new records as market shows signs of stabilising

Rents reach new records as market shows signs of stabilising

Average advertised rents outside London rose 1.9% in Q2 2026 to a record £1,397 pcm, with London rents also hitting new highs. Despite this, rental growth is moderating as affordability concerns influence tenant behaviour.

Rightmove’s latest data reveals that average rents across Great Britain outside London increased by 1.9% in the second quarter of 2026, reaching a new high of £1,397 per calendar month. This marks an annual increase of 2.3%, up from 1.6% in the first quarter. In London, rents rose by 2.0% in the quarter to £2,791 per calendar month, with annual growth accelerating to 2.9%. The surge in London rents was driven largely by Inner London, which also saw the steepest decline in available rental supply.

The rental market is showing signs of stabilisation following the intense competition and double-digit growth seen in 2022 and 2023. Rightmove attributes this moderation to affordability pressures faced by tenants, with wage growth easing to 4.4% annually. Renters are increasingly price-conscious, particularly in higher-cost areas, which is helping to temper rental increases despite continued upward pressure on rents.

Details from Rightmove’s rental market report

Rightmove’s figures indicate a return to more typical seasonal rent patterns and a more balanced market compared to the peak years of 2022 and 2023. The portal’s property expert Colleen Babcock noted that while rents have reached new records both inside and outside London, the pace of growth is more sustainable.

Regional disparities remain significant, with northern areas of England, which tend to be more affordable, still experiencing some of the strongest rental growth. Meanwhile, London’s rental market is characterised by a notable increase in rents accompanied by a sharp drop in available supply, underscoring the influence of local supply and demand dynamics on pricing.

Despite the slowing growth rates, the rental market continues to exert pressure on affordability, a key concern for tenants and landlords alike. The easing of wage growth relative to rent increases means that the proportion of income spent on rent remains high for many renters, particularly in London and other high-demand areas.

Context and implications for landlords and letting agents

These rental trends come amid ongoing changes in the regulatory environment, including the implementation of the Renters’ Rights Act and evolving landlord licensing and safety obligations. The moderation in rent growth may reflect landlords’ cautious pricing strategies in response to tenant affordability constraints and regulatory scrutiny.

For small portfolio landlords and letting agents, the data suggests that while rental income opportunities remain, aggressive rent hikes may be less viable in the current market. Maintaining occupancy and tenant retention through competitive but reasonable rents could be more sustainable than pushing for maximum increases.

Moreover, the drop in available rental stock in London highlights the importance of proactive property management and marketing to attract tenants in a competitive environment. Landlords should also be mindful of the regional variations in demand and tailor their rental strategies accordingly.

Practical considerations for managing rental portfolios

Landlords should review their rent-setting processes to ensure they align with current market conditions and tenant affordability. Regularly monitoring local rental values and supply trends can help inform decisions on rent adjustments and lease renewals.

Letting agents play a crucial role in advising landlords on realistic rent levels that balance income goals with tenant retention. They should also support landlords in understanding the impact of regulatory changes that affect tenancy agreements, possession procedures, and safety compliance.

Given the ongoing regulatory developments, landlords should keep thorough records of rent reviews, tenant communications, and compliance actions to mitigate risks and demonstrate good practice in case of disputes or inspections.

Uncertainties and future outlook

While the current data indicates a stabilising rental market with moderate growth, future trends remain subject to economic conditions, government policy changes, and housing supply dynamics. Inflation rates, interest rates, and further legislative reforms could influence both landlord costs and tenant affordability.

Landlords and agents should stay informed of any updates to tenancy laws, especially those affecting rent increases, possession rights, and safety standards. The evolving landscape means that what is sustainable today may require adjustment in the near future.

What landlords should consider now

• Review rent levels against current market data to avoid overpricing and potential void periods.
• Monitor regional supply and demand trends to tailor letting strategies effectively.
• Maintain compliance with tenancy and safety regulations to reduce legal risks.
• Keep detailed records of rent reviews and tenant interactions for transparency and dispute prevention.
• Stay updated on regulatory developments, including the Renters’ Rights Act and licensing requirements.

Supporting landlords through rental market changes

Membership of The Landlord Association (TLA) offers access to practical compliance resources and guidance tailored to the evolving rental market. TLA’s new property management and compliance platform, ORBIT, currently in BETA testing, is designed to help landlords and letting agents organise portfolios, manage rental documentation, and keep track of regulatory obligations. Features relevant to rent management include recording rent reviews and tenant communications, ensuring evidence of compliance, and monitoring changes in tenancy law.

Exploring TLA membership can provide landlords with up-to-date information and tools to manage rental pricing strategies effectively while maintaining compliance. ORBIT’s developing capabilities aim to support landlords in adapting to market and regulatory shifts with greater confidence and organisation.

Looking ahead, landlords should prioritise balancing rental income with tenant affordability and compliance readiness to navigate the rental market’s gradual shift towards stability.

Sources: Landlord Today