According to Pegasus Insight research, for those intending to increase rents, the average anticipated rise is 6%, compared to 5% this time last year.
This echoes Office for National Statistics data, which shows that average rent prices climbed 5.7% year-on-year in August to £1,348 per month.
Pegasus Insight said that while fewer landlords plan to raise rents, the increases planned by the remainder are “significant by historic standards”.
It continued that it suggested that the “market is reaching a natural limit” as many landlords may have already adjusted rents to current market levels, while others are mindful of affordability constraints.
The Renters’ Rights Bill has also been cited as a factor, as this will impose limits on rent increases to once per year alongside wider reforms such as the abolition of Section 21 eviction notices.
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The bill is currently in its final stages, having come back to the House of Commons with amendments from the Lords. Most amendments from the Lords were rejected by housing minister Matthew Pennycook, and the consideration of Commons amendments is slated for 14 October.
Pegasus Insight said that royal assent, when it becomes law, is expected in November, with implementation slated for mid-2026. This could mean that landlords are acting pre-emptively to ensure their rent levels are sustainable prior to the new legislation.
Mark Long, founder and director of Pegasus Insight, said: “Landlords remain under pressure from higher costs and policy change, and the instinct to raise rents remains strong. But our research shows that the market may be reaching an affordability ceiling. When rent levels rise too far, demand can falter – this is price elasticity in action, and many landlords recognise that pushing further risks losing tenants or facing longer voids.
“At the same time, the forthcoming Renters’ Rights Bill is influencing decisions now. With annual rent increase limits and tribunal challenges on the horizon, landlords are reviewing their portfolios carefully. This is a delicate period for the private rented sector: if costs keep rising as regulation tightens further, we may see a fresh wave of rent inflation despite the moderation in intentions revealed by our latest research.”
