England’s Rental Market Under Strain, 100 Days After Labour’s Renters’ Rights Act

Landlords Are Leaving, Rents Are Rising: The Unintended Cost of Labour’s Rental Reforms.

Three months after Labour’s flagship Renters’ Rights Act took effect in England, on 1 May 2026, early data suggests the reforms may be producing outcomes at odds with their stated purpose.

What the Act changed

The legislation, which received Royal Assent in October 2025, abolished Section 21 “no-fault” evictions, ended fixed-term assured shorthold tenancies in favour of rolling periodic tenancies, and restricted landlords to raising rent only once every 12 months, via a formal Section 13 notice. It also banned landlords from accepting bids above the advertised asking rent, a practice previously blamed for fuelling bidding wars between prospective tenants, and prohibited landlords from demanding rent in advance.

Rents have risen, not fallen

Despite the Act’s aim of giving tenants greater stability, rents have continued to climb. According to the Goodlord Rental Index, the average monthly rent for a new tenancy in England rose from £1,211 in May to £1,309 in June, taking annual rent inflation to 6.5 per cent, the highest rate recorded since August 2024, and well above the 3 per cent CPI inflation figure for the same period.

Separate figures from the property portal Rightmove show a similar pattern. Average advertised rents outside Greater London reached a record £1,397 a month between April and June, while rents in Greater London climbed to an average of £2,791 a month, a 2 per cent quarterly rise and the steepest such increase in the capital since 2023.

Industry figures interviewed by The Telegraph suggested one explanation: because landlords can now only raise rent once a year, many are choosing to set higher starting rents for new tenancies, rather than risk being locked into a lower rate for the following twelve months. One lettings agency reported a 36 per cent year-on-year increase in landlords raising their initial asking prices, with some pushing rents 5 to 10 per cent above what they expect to achieve.

Supply is shrinking as demand grows

At the same time, the number of available rental properties has fallen. Rightmove recorded a 1 per cent drop in rental listings between April and June 2026, compared with the same period in 2025, as landlords continued to exit the sector, a trend a decade of tax changes had already set in motion before the new Act arrived.

Estate agents told The Telegraph that tenant demand has outpaced this shrinking supply, partly because weaker first-time buyer activity is pushing more people into renting. One agency reported a 25 per cent year-on-year rise in the ratio of prospective tenants to available properties. Rightmove separately found that the average rental listing attracted ten enquiries in July, double the pre-pandemic average of five.

Savills research cited by The Telegraph found that more than one in ten landlords with properties worth £1 million or more had sold a rental home since the Act came into force, suggesting the exodus from the sector is accelerating rather than slowing.

Tenants without a UK guarantor face particular difficulty

The ban on landlords requesting rent in advance appears to have created a specific problem for overseas tenants, including international students, who have traditionally relied on paying several months’ rent upfront in the absence of a UK-based guarantor. With that option now closed off, letting agents told The Telegraph that landlords have become warier of taking on tenants without an established UK rental history, making it harder for this group to secure housing ahead of the new academic year.

Further changes are coming

Landlords are also facing a tightening tax regime. From April 2027, the rate of tax on rental income is due to rise by two percentage points, which analysis cited by The Telegraph suggests could cost a landlord earning £50,000 in rental profit an extra £1,000 a year. Separately, around 259,000 landlords will be required to sign up to Making Tax Digital this financial year, under rules that apply to landlords and self-employed workers with turnover of at least £50,000; that threshold is due to fall to £30,000 next year and to £20,000 from 2028.

The government’s response

A spokesperson for the Ministry of Housing, Communities and Local Government, quoted in The Telegraph’s reporting, disputed the picture painted by the industry data, saying new rental listings had risen by 7 per cent over the past 12 months and that rent inflation had been easing since late 2024. The department said the Act was intended to give tenants “greater security and stability” and to help them “avoid the risk of homelessness”, while also offering landlords “the confidence and support they need to continue to invest in the sector”.

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Reporting drawn from data published by Goodlord, Rightmove and Savills, as reported by The Telegraph, 8 August 2026.

Figures on rent levels and rental supply are drawn from the Goodlord Rental Index and Rightmove’s Q2 2026 Rental Trends Tracker. Figures on landlord sales are drawn from Savills research. All data and quotations reported here were originally compiled by The Telegraph.