Renters' Rights Act triggers sharp rent spike as landlords front-load increases

Landlords adjust pricing strategy following Renters' Rights Act restrictions

English landlords appear to be responding to the Renters' Rights Act by setting significantly higher initial rents on new tenancies, according to the latest rental market data. The shift suggests the private rented sector is recalibrating its pricing strategy in response to restrictions on mid-tenancy rent increases introduced in May 2026.

The Goodlord Rental Index, which tracks completed tenancy agreements rather than advertised rents, recorded average monthly rent for new tenancies at £1,309 in June – up 6.5% year-on-year from £1,229 twelve months earlier. This represents the highest annual rental inflation recorded since August 2024. The month-on-month increase was equally striking, with rents jumping 8.1% from May's average of £1,211, marking the largest single-month rise since July 2025.

Regional variation masks widespread rent pressure

Rental price increases were recorded across every English region on both annual and monthly bases, though geographical variation was pronounced. Yorkshire and the Humber recorded the strongest annual growth at 16%, followed by the South West and North East, where rents rose by more than 10% year-on-year.

On a monthly basis, the South West demonstrated the most dramatic movement, with rents increasing 29.5% between May and June. The North East followed with a 15.7% month-on-month rise, whilst Yorkshire and the Humber saw increases of 12.6%. The West Midlands recorded the smallest monthly adjustment at 0.5%.

These figures come after a relatively subdued first half of 2026, when April and May had shown year-on-year rental inflation of just 1.7%. The June acceleration therefore represents a marked departure from the early-year trend and has exceeded both current consumer price inflation and wage growth measures.

Understanding the Renters' Rights Act impact

William Reeve, CEO of Goodlord, attributed the sharp increase to landlords' strategic response to the Renters' Rights Act's provisions on mid-tenancy rent rises. Under the new legislation, landlords are now restricted to raising rents only once per year via Section 13 notices, removing previous flexibility to increase rents more frequently.

"One possible explanation for June's spike in rents is the change the RRA has brought to landlords' ability to increase rents during tenancy," Reeve said. "With landlords now only allowed to raise rents once a year via Section 13, there's a clear incentive to begin new tenancies at higher rates than they may have previously."

This suggests landlords may be front-loading rent increases into initial tenancy agreements, compensating for the reduced ability to raise rents during the term. Rather than annual incremental increases spread across the tenancy period, landlords could be seeking larger upfront adjustments to account for the restrictions ahead.

Market implications remain uncertain

Whilst the data suggests a material shift in landlord behaviour, Goodlord acknowledged that it remains too early to determine whether June's spike represents a temporary market recalibration or signals the beginning of a sustained upward trend in the private rented sector.

Reeve noted: "The coming months will reveal whether June's figures mark a one-time recalibration of the market, or the beginning of a new normal across the PRS." Summer typically brings increased rental activity, and distinguishing seasonal factors from structural market changes will require further monthly data.

For buy-to-let investors monitoring market conditions, these figures underscore the importance of understanding how regulatory changes influence landlord behaviour and tenant affordability. Investors seeking to identify emerging opportunities in the changing rental landscape may benefit from analysing regional variations and planning alert tools to identify emerging investment hotspots.

Source: Property Industry Eye.