“The market is more price sensitive, with landlords needing to be realistic from the outset to secure a tenant and reduce the risk of void periods”
– Colleen Babcock – Rightmove
Average advertised rents outside London held flat at £1,370 per calendar month in Q1 2026, marking the first time since 2017 that rents have not risen from Q4 into Q1. While year-on-year rents remain 1.6% higher than the same point last year, that figure is the lowest it has been since 2018, according to Rightmove data.
Two factors appear to be driving the more subdued picture. Rental market supply and demand are at their most balanced since 2020, with lower tenant competition and a wider choice of homes reducing upward pressure on rents.
At the same time, slowing wage growth and inflation still running above the Bank of England’s 2% target are stretching affordability, particularly in higher-priced areas such as London.
In the capital, average advertised rents rose 0.7% over the quarter to £2,736 per calendar month, though that remains below Q3 2025’s record level.
What’s happening with rental market activity?
Ahead of the Renters’ Rights Act taking effect on 1 May, there are no major signs of significant shifts in market dynamics at a national level. Available homes to rent are 3% higher than a year ago, reaching their highest level for this time of year since 2021, but there has been no surge in newly listed properties. New rental listings in March were actually 6% lower than at the same point last year.
UK Finance data points to a small uptick in new buy-to-let loans at the start of the year, with buy-to-let remortgages up 18% year on year and total buy-to-let loans 14% higher at the start of 2026 compared with early 2025. That data covers January only; however, before recent rate rises took hold.
The average rental home now receives 8 enquiries, down from 11 a year ago and significantly below the peak of 29 recorded in 2022, though still above the pre-pandemic average of 5. More than a quarter (26%) of rental listings saw a price reduction while advertised, the highest proportion since Rightmove began tracking the metric in 2012. Agents report landlords adopting a more measured approach, focusing on securing reliable tenants and keeping rents competitively priced.
What’s happening with buy-to-let mortgage rates?
Borrowing costs have risen sharply since the outbreak of war in Iran. The average two-year buy-to-let mortgage rate for a landlord purchasing with a 25% deposit now stands at 5.79%, up from 4.86% before the conflict began. Rightmove’s daily buy-to-let mortgage tracker has captured the speed of that movement, though its longer-term impact on new investment remains unclear.
“Rents holding steady this quarter reflects how affordability remains stretched, but also how supply and demand are more balanced,” said Colleen Babcock, property expert at Rightmove.
“With more homes available to rent and less competition between tenants, landlords need to position rents correctly for the current market to secure a tenant.”
“As market conditions rebalance, homes are taking longer to let. The market is more price sensitive, with landlords needing to be realistic from the outset to secure a tenant and reduce the risk of void periods. Around 26% of rental listings are now reduced in price while advertised, the highest proportion recorded since Rightmove began tracking this metric in 2012.”
“Ahead of the Renters’ Rights Act coming into force, the data doesn’t suggest a single or immediate reaction from landlords. Instead, behaviour appears more cautious and considered, with many focusing on long-term tenancies, pricing and avoiding void periods in a more balanced market.”
“It’s still early days, but the most immediate shift due to the war in Iran has been some significant increases to borrowing costs for landlords, which may filter through to the market at a later stage.”
“Across Q1, we’ve seen a clear pick-up in lettings activity, particularly towards the end of March, with a noticeable increase in viewings and agreed lets compared to earlier in the quarter,” said Adam Jennings, head of residential at Chestertons.
“Well-presented, correctly priced properties are continuing to let quickly, especially in areas where supply remains constrained.”
“With the Renters’ Rights Act coming into force from 1 May, there has understandably been some uncertainty among landlords. However, the strength of demand we saw in late March has provided reassurance, with many landlords continuing to see competitive levels of interest and strong rental values.”
“In parts of the prime market, we’re also seeing demand supported by international relocations, including some movement from the Middle East, which is adding to overall activity. Overall, while the legislative backdrop is evolving, the lettings market has remained active, with momentum building into the end of the quarter.”
