The number of tenants experiencing rent increases has fallen by 23% in the first month following the introduction of the Renters’ Rights Act, according to new data from Hamptons.
Analysis of Connells data shows the number of rent increases between January and April was 3% lower than in the same period of 2024. The research found little evidence that landlords accelerated rent rises ahead of the legislation coming into force.
Annual increase system
If the level of rent increases recorded in May continues across the remainder of the year, 31% of sitting tenants would see their rent rise, down from 40% in the 12 months to May 2024. Hamptons attributes this decline to the new system under the Act, which limits rent increases to once per year.
Aneisha Beveridge, Head of Research at Hamptons, said: “One of the first impacts of the Renters’ Rights Act has been a reduction in the number of existing tenants seeing their rent rise. While this partly reflects a backdrop of slower rental growth, falls suggest landlords have, at least initially, been less likely to increase rents than under the previous system where changes predominantly coincided with a tenant signing a new contract.”
Regional variations
Among tenants who experienced rent changes, the average increase in May stood at 5.4%. In Scotland, where a similar system has been operating for longer, the average increase reached 7.7%.
The data comes as regulatory pressure on landlords intensifies across the UK, with authorities such as Tower Hamlets issuing three-year bans to landlords who fail to meet compliance standards.
Rental growth for tenants moving into new properties remains at relatively low levels by recent standards. Beveridge noted: “If the pattern seen in Scotland plays out in England, tenants may see their rent rise less often going forward. While rental growth on newly agreed lets remains cool by recent standards, landlords appear to be taking a more cautious approach when selecting new tenants.”
Market implications
The shift in rent increase patterns marks a significant change in the buy-to-let sector, as landlords adjust their strategies to comply with the new regulatory framework. The data suggests that the transition to annual rent reviews may create more predictability for tenants whilst potentially affecting landlord yield calculations.
