The Changing UK Rental Market Rising Costs and New Challenges for Landlords

UK Rental Market Sees 6% Rent Increase as Landlords Reconsider Their Investments

The rental sector in the United Kingdom is going through big changes: higher rental rates, landlords rendering their investments more profitable, and concerns related to the availability of rental property are coming to the fore in the country. Following the introduction of the Renters' Rights Act (RRA), there are further transformations that make it of utmost importance for landlords to keep abreast of the situation in the rental property sector. 

The research conducted by Ringley Group shows that asking rents surged in the 3 months since the RRA came into effect. According to the recent report, in 21 cities and towns in the UK, asking rents grew by 6% in the period. The report indicates that more landlords are willing to get out of the rental market.

Increasing Rents and Stress on Tenants

Rental rates have gone up again, as average rents went up by 5.6% during the first sixty days after implementation and then reached 6% after three months of observation.

One of the factors that support rental demand is the gap between property prices and rental prices in the housing market. As owning homes is a challenge for many families, more people tend to stay in rental properties longer.

This demand limitation alongside limited availability of rental properties may drive more competition among renters, attracting more pressure on rents.

For property owners, high rental demand provides opportunities. However, profitability is heavily influenced by the ability to find appropriate tenants, to set proper rents, and to manage properties well.

More Landlords Looking at Leaving the Industry

The study indicates that uncertainty is becoming increasingly prevalent among private landlords. Around 35% of private landlords either disposed of or have attempted to dispose of their property over the last year.

In addition, England's private rented sector has lost in excess of 354,000 homes over the three years to May 2025.

Changes in legislation, increases in running costs, and extra compliance duties are some of the issues affecting landlords' decisions. The shortage of available rental properties might be worsened if even more landlords leave this market.

For the remaining landlords, it will be necessary to manage costs and obligations effectively. Affordable letting and property management services can make it easier to operate a rental business.

Investment in Build to Rent Sector Continues to Expand

While one may face obstacles in the rental housing industry, institutional investment appears to be increasing.

Investments in the Build to Rent sector were approximately £5.3 billion in 2025, and projections indicate an increase reaching £5.7 billion in 2026. On the other hand, investment in single-family rentals was over £3 billion in 2025, showing a 28% increase in this branch on an annual basis.

On the other hand, the housing sector is still not able to meet its good intentions. Build to Rent is currently providing around 17,000 homes per year, with its potential reaching 30,000 homes per year.

This situation shows that attention should be paid to investments in the rental housing sector, with a special focus on the investments of individual landlords.

Appeals for Government Assistance 

The Ringley Group has called upon the Government to act in providing solutions that could promote investment and enhance the feasibility of rental investments.

The existing recommendations include targeted reductions in Stamp Duty Land Tax for developments involving high-density residential properties as well as lifting the council tax charges from newly constructed houses that remain unoccupied during their initial let period.

The aim of these measures is to lower investment costs, provide assistance to new investments, and boost trust in the rental market. However, landlords need affordable services and appropriate support in order to adjust to the new market dynamics.

How 99home Helps Owners Adapt to the Tightening Market 

Landlords have to find affordable ways to manage their properties as a result of rising prices, changing regulations, and the increasing number of obligations involved with property management. 

At 99home, we offer flexible lettings and management services to streamline the renting process. Our offerings run the gamut from property advertising and tenant referencing to managing tenants and rent. 

With letting services priced from £39 and property management services starting at £99 per month, landlords have a range of options that fit their needs and budgets.

Future Prospects

The most recent data illustrates the importance of a balanced rental market that is beneficial for landlords as well as tenants. Despite a strong demand for rental properties, ensuring a sufficient supply of homes and encouraging landlords to remain in the business is vital for the sustainability of the sector. 

The key for landlords is to keep track of the changes and to find the right professionals to help them manage their rental property. 

Are you thinking of letting or managing a rental property? Then get in touch with 99home and find out more about our affordable letting or property management services.

99HOME | SELL • LET • MANAGE

Website: www.99home.co.uk
Phone: 0203 5000 999
Email: info@99home.co.uk