Rent increases across Britain are slowing while tenant demand falls by less, according to LegalforLandlords analysis that points to a rental market settling into a more sustainable balance.
The firm said that if the trend continues, some of the pressures the Renters’ Rights Act targets could begin to ease.
LegalforLandlords compared average estimated rent changes with average estimated tenant demand across Great Britain to show how the two move together as regulation evolves. The figures by period:
- Average rent rose an estimated 8.7% between 2023 and 2024, from £1,174 to £1,276 a month, while tenant demand fell 4.7%, from 35.7% to 31.0%.
- Rent increases narrowed to 6.3% between 2024 and 2025, with demand down 2.8%.
- The latest figures show a 2.9% average increase between 2025 and 2026, and a 2.7% fall in demand.
The data shows that as rent increases have become more modest, the accompanying decline in tenant demand has also reduced. The firm said the pattern has appeared consistently since 2023, and that the figures could indicate the market is finding a more sustainable equilibrium between rents and tenant demand.
“After several years of increasingly stretched affordability for tenants, we think landlords should be encouraged by signs that the rental market could be moving towards a more sustainable balance between rents and tenant demand,” said Sim Sekhon, group chief executive of LegalforLandlords.
“The introduction of the Renters’ Rights Act brings another important change to the way rents can be increased. Landlords can generally only increase rent once a year and must follow the prescribed process, while tenants have the ability to challenge an increase if they believe it is above the open-market rent.
“Rather than seeing this simply as a restriction on landlords, there is a strong argument that greater predictability could ultimately benefit both sides of the rental market. A stable rental market is a more secure rental market, and reliable tenant demand can be more valuable to a landlord than pursuing rapid rent growth only to find that higher prices lead to longer void periods, increased tenant turnover, or even arrears.
“The objective shouldn't be to push rents as high as possible. For landlords, sustainable rental income depends on finding the right balance between achieving a fair market rent and maintaining a successful, long-term tenancy.
“If the trend we are seeing continues, and the new rules encourage landlords to take a more measured approach to rent increases, we could see a rental market that is less volatile and more predictable for everyone involved. That would be a positive development for landlords and tenants alike.”
