The Renters Rights Act, which took effect on May 1st, is already having an impact on the market, but not necessarily in the way that was forecast.
The new rules were expected to drive more landlords out of the industry, especially since borrowing costs have climbed. But, in a surprising new trend, landlords are acquiring new properties. They appear keen to make the most of sharp increases in rents in a few locations, including some postcodes in the capital. Often, it’s larger landlords snapping up homes being sold by other smaller landlords.
As a result of this unexpected twist, landlord purchases accounted for 13.3% of all home sales between January and April, the highest share since 2016. Some 23% of the properties acquired by landlords had been previously let out. This compares with 16% in 2025 and a five-year (2019-2023) average of 9.9%.
There are regional variations in landlord disposals. In the South, landlords are mostly selling their properties to first-time buyers or to households seeking more space.
But in the North, where higher rental yields tend to offset steeper mortgage costs, landlords’ properties are being acquired by other landlords. As many as 35.8% of buy-to-let investors’ purchases in the North were formerly let properties.
In all parts of the North, landlord purchases made up 23.9% of all transactions, compared with 14.5% in the period between January and April 2025.
"23% of the properties acquired by landlords had been previously let out. "
Some of the investors buying now have evidently noted that a reduction in the stock of rental homes is helping to push up rents, which are increasing at the fastest rate for nearly a year.
But the story for newly let rents is more nuanced. In the first month after the Renters’ Rights Act became law in England, rental growth for tenants moving into a new home remained relatively subdued.
Across Great Britain, the average price of a newly agreed let rose 1.1% over the year to May, easing slightly from 1.2% in April. That leaves the average tenant moving into a new property paying £1,382 per month.
"Landlords will be spacing out rent increases over longer periods. "
There are still pockets where rents are edging higher. For example, in the South East, the average monthly rent reached £1,500 in May, 2.0% higher than a year ago and the first time any region outside London has crossed that threshold. London rents, by comparison, now stand at £2,294 pcm. The capital last sat at £1,500 per month in June 2012.
Even so, weaker house price growth, combined with rents that are still moving upwards, has improved the maths for new investors. A landlord buying a previously let home this year is receiving an average gross rental yield of 7.0%, partly reflecting higher rents, but also the sale of lower-yielding properties. In 2022, the average yield was 5.9%.
The new direction of rents
One immediate effect of the implementation of the Renters’ Right Act on May 1st has been a fall in rent increases for existing tenants.
In May this year, 23% fewer tenants were told their rents were going up than in the same month of 2025. The average rent increase was 5.4%, down from 5.5% in May 2025 - and 7.3% at the market’s peak a few years ago.
If this trend continues for the rest of 2026, 31% of sitting tenants will face rent increases, against 40% in 2025 and 50% in 2024. The jump in 2024 reflected the double-digit growth in rents on new tenancies.
The data provides signs of a structural shift in how rents will now be adjusted. Under the Renters’ Rights Act, rents can be raised only once a year, and most tenancies become ‘periodic’ or rolling rather than fixed-term.
Previously, rents were often reviewed at the time of a rental renewal, meaning that increases were frequent and incremental. It now seems that landlords will be spacing out increases over slightly longer periods, but may put forward bigger uplifts when they do.
This is the pattern seen in Scotland, where rolling tenancies have been in place since 2017, and tenants have learnt to expect fewer but larger increases. The average rent increase in Scotland in May this year was 7.7%. This highlights what would appear to be a normalisation of rents following the removal of a 3% cap on increases in April 2024.
For context, amongst tenants who saw their rent change in England, the average increase in May was 5.4%.
In advance of the new legislation, there was little evidence that landlords were raising rents. Indeed, rent increases in England between January and April were 3% down on the previous year.
