Landlords Raising Rents as Bidding War Ban Takes Effect

Renters' Rights Act Prompts Strategic Rent Rises

Landlords across England are raising their asking rents in response to Labour's Renters' Rights Act, which introduced a ban on competitive bidding for rental properties. However, the motivation behind these increases reveals a more nuanced market dynamic than initially anticipated.

According to lettings specialist Chestertons, the strategy reflects an adjustment to new rules prohibiting letting agents and landlords from encouraging tenants to engage in bidding wars. Unable to rely on competitive pressure to drive prices upward, many landlords are now setting higher asking rents at the outset, expecting tenants to negotiate downwards to a price point that aligns with the landlords' original targets.

This tactical shift is already visible in property portal data. The latest Rightmove Rental Trends Tracker recorded asking rents increasing by 2.9% year-on-year during the second quarter of 2026—the strongest growth rate recorded in two years, up significantly from 1.4% growth in the preceding quarter.

London Leads Rental Growth Resurgence

London's rental market has outpaced the wider UK for the first time since mid-2023, with asking rents climbing 2.3% year-on-year. This marks a notable reversal of the capital's previous underperformance relative to regional markets.

The trend began materialising in June and has persisted through July, though the rate of increase has moderated as landlords gain greater confidence in their pricing strategies. Chestertons' head of lettings, Katinka Hill, noted that while activity levels initially surged following the Act's introduction in May, momentum eased considerably in July before picking up again in early August.

"Activity seen immediately after the legislation was introduced in May eased off in July," Hill stated. "However, in the first 10 days of August our branches have seen applicant registrations up 18% year-on-year, which is in line with the seasonal summer uptick we would expect at this time of year."

Supply Constraints and Demand Pressures

Understanding the broader context is essential for investors assessing current opportunities. The rental growth acceleration occurs against a backdrop of tightening supply, as industry reports indicate more landlords are selling or reducing their portfolios. Simultaneously, tenant demand continues to increase, creating conditions where higher asking rents become sustainable.

For landlords and property investors monitoring market conditions, this period represents both challenges and opportunities. The bidding war ban requires a shift in negotiation tactics, but the sustained demand growth and reduced supply suggest that well-positioned rental properties remain attractive investments. Investors seeking to identify undervalued opportunities or properties with strong rental yield potential can use specialist tools to analyse market dynamics and locate emerging hotspots.

Those considering buy-to-let investments may find value in analysing rental trends across different regions, particularly as London rebounds and secondary markets continue to develop.

What This Means for Investors

The legislative changes under the Renters' Rights Act, whilst constraining certain marketing practices, have ultimately returned certainty to the rental market following the initial uncertainty. This stability has encouraged fresh activity, though landlords must now adapt their pricing and negotiation strategies accordingly.

For existing landlords, the findings suggest that transparent, confident pricing strategies may prove more effective than relying on competitive bidding dynamics. For prospective investors evaluating entry points, the current environment—characterised by moderate growth, supply constraints, and sustained demand—warrants careful analysis before committing capital.

Source: Property Industry Eye.