New data from Hamptons reveals a staggering 23% drop in rent increases for sitting UK tenants since the Renters' Rights Act kicked in. This significant shift is causing a ripple effect throughout the rental market, with landlords less likely to push through rent rises that could leave tenants facing financial hardship.
The research indicates that if this trend continues, around 31% of existing tenants would see their rent rise - a substantial decrease from the 40% recorded in the 12 months leading up to May 2024. Hamptons attributes the decline directly to the new system introduced by the Act, which limits rent increases to just one occurrence per year.
Aneisha Beveridge, Head of Research at Hamptons, points out that slower rental growth contributes to this trend, but notes that landlords are less likely to increase rents under the new framework. The data also reveals little evidence of landlords accelerating rent rises in the period leading up to the Act's implementation, dispelling concerns of a pre-emptive surge.
For those who did experience a rent change in May, the average increase stood at 5.4% - with regional variations evident across the UK. In Scotland, where a similar system has been in operation for longer, the average increase was higher at 7.7%. This comparison offers a glimpse into how the English market might evolve over time as landlords adapt to the new regulations.
The shift represents a significant change for the buy-to-let sector, with landlords adjusting their strategies to comply with intensified regulatory pressure - including three-year bans in areas like Tower Hamlets for non-compliant landlords. While rental growth for new tenancies remains subdued, the data implies a more measured approach by landlords towards existing tenants, potentially fostering greater stability in rental payments.