The Renters Rights Act does a lot of things to make renting better, from providing better protections from eviction to making it easier to tackle negligent landlords. But it does little to make rents more affordable.
That said, it’s worth being aware of what your rights on rent are, as they could come in useful, whether you’re planning to move or stay put. And it’s important to know that how these protections work all depends on whether the shortage of homes is getting better or worse, and other economic trends.
Although a lot of signs are pointing to rents rising relatively slowly in the near future, the recent changes don’t protect renters from unaffordable rent increases if costs rise dramatically again. That’s why we want the new government to bring in measures to really slam the brakes on rents.
Rents rising slowly after huge post-pandemic spike
First, let’s look back at what has happened to rents so far this decade. In 2020, as the country was locking down and many of us moved out of cities to work remotely and save on rent (many of us moving back in with parents), landlords struggled to find tenants so rents on new tenancies (recorded by Zoopla) fell in some places, including London.
By mid-2021, we were getting vaccinated and the return to the cities began, creating a surge in demand for rented homes. Wages also started growing in this period so landlords were able to take advantage of renters’ extra spending power. These trends combined to push up new tenancy rents dramatically – as fast as 12% in the 12 months to August 2022.
As tenancies that started during the pandemic came up for renewal in 2022 and 2023, many landlords tried to raise rent to match the new market level. This was particularly true of landlords with mortgages, who faced rapid increases in interest rates. This pushed all-tenancy rent inflation (recorded by the ONS) up as well, peaking at 9.2% in March 2024, with two thirds of renters we surveyed reporting a rent increase at around the same time.
As the number of renters looking for a new place stabilised, inflation on new rents started falling in 2024, and fell below wage growth in late October 2024. A little over a year later, all-tenancy rent inflation was back below wage growth.
Right now, both inflation on new tenancy rents and all-tenancy rents is running at 2.1% and 3.3% respectively, while earnings are rising at more than 4%. This means that while affordability for the average renter is technically improving, it is starting from a very bad place – and those of us relying on benefits are only getting Local Housing Allowance rates that are based on rent levels of nearly three years ago.
The Renters Rights Act and new tenancies
There are two new rules about rents and new tenancies. First, landlords cannot require tenants to pay more than one month’s rent before signing a tenancy agreement. This is to stop landlords blocking tenants who don’t have savings from getting a home (though they can still ask for a guarantor, which is difficult for many of us). Once the tenancy is agreed, the tenant can pay multiple months’ rent in one go, which can suit some people with irregular income. But this rule doesn’t do anything about the monthly rent level – it still has to be paid eventually.
Second, landlords and letting agents cannot accept (or ask for) a higher rent than has been advertised. This is to stop bidding wars, which landlords and agents have often encouraged in order to maximise the rent they get from a property when a lot of renters are interested in it. Our surveys have found this to be particularly common in 2022-23, the peak of new tenancy rent inflation.
However, this rule is also unlikely to reduce the rent levels renters end up paying, because there is nothing stopping landlords advertising at a higher initial rent and accepting offers below that if no renters come forward. The main benefit of ending bidding wars is to save renters from going to view properties that look affordable but ultimately are not because of the competition from other renters. The outcome will be less stress and wasted afternoons, not necessarily lower rents.
Because rents have not been rising so quickly in the past couple of years, we may not currently have the conditions that previously would have led to bidding wars. And it might be hard to measure how much letting agents are setting higher initial rents before reducing them. While Zoopla’s rent index is based on asking rents, it is “adjusted to reflect achieved rents”. We may however see an increase in “time to let”, which Zoopla also records – at 20 days in March 2026 (up from 13 days in 2022).
The Renters Rights Act and existing tenancies
Since 1 May, the only way that landlords can raise rent on existing tenants is by serving a Section 13 notice. This existed before but usually landlords could raise the rent by asking the tenant to renew, or threatening a Section 21 notice. Landlords can only serve a Section 13 notice once per year and the tenant can challenge the increase at the first-tier tribunal.
There are pros and cons to doing this.
The tribunal will decide if the proposed rent is “excessive” by assessing what the rent would be if the property was put on the market empty. That means if local rents have risen more quickly than your income, you could face an unaffordable rent rise. It’s not entirely clear how local rents are measured: we have been told that the tribunal uses achieved rents, which would be better than advertised rents, which are often just a finger in the air. But there’s no public record of the former, and the decisions the tribunal publishes often refer to the tribunal members’ “knowledge of the local market”. So it’s hard for tenants themselves to judge whether a proposed rent is likely to be excessive and worth challenging. It also costs £47 to apply to challenge the rent increase.
However, beyond the fee, there’s actually not much downside to challenging it. The tribunal can’t raise the rent by more than what the landlord has asked for, and it could be lower – particularly if the property is in poor condition or you have made your own improvements to it. And until the tribunal has made its decision you won’t have to pay any extra rent – previously rents set by the tribunal were backdated to when the original Section 13 notice expired.
How all this might interact
It’s hard to know how many people will use the tribunal, particularly in the early months. As the Renters Rights Bill was being debated, opponents warned that the new protections would quickly lead to a backlog. We’re not so sure, for a few reasons.
First, low rent inflation at present means that a lot of landlords may hold off from asking for more, particularly if the added protections for tenants encourage them to negotiate a modest increase, instead of risking a long wait for a tribunal decision.
Second, fewer landlords will have higher costs to cover. While some landlords face higher interest payments this year, the increase since the Strait of Hormuz crisis is a lot less dramatic than the one we saw in 2022-23, when buy-to-let mortgage payments roughly doubled (this year BTL mortgage rates have increased from around 4.8% to 5.5% (£)).
Third, aside from very sluggish housebuilding rates, the economic forecasts are not favourable for landlords. It’s possible that we see another spike in overall inflation once energy price increases take effect, but the jobs market is weaker than the post-pandemic one, so it’s unclear whether wages could keep up with consumer prices, and filter through to rents, as they did before. The Office for Budget Responsibility actually predicts wage growth to slow in the coming years so that it barely keeps up with the Consumer Prices Index.
Fourth, even if lots of landlords do ask for higher rents, it will take time for awareness of, and confidence in, the tribunal among tenants to grow. Early research suggests that around a third of landlords did not give their tenants the government-mandated information sheet about new rights by 31 May. That’s a lot of renters who won’t necessarily know that the tribunal could help.
Longer run rent rises
It took the reverberations of a pandemic to push rent inflation into double digits, so it would take another economic shock to see hikes of that scale again. But it is still conceivable that rents rise at more than 5% in the years ahead, and there is a risk that this will lead to even higher advertised rents as landlords and agents adjust their pricing strategies in response to the anti-bidding war rules, and this will filter through into tribunal decisions.
To reduce this risk we need better data on rents actually being paid, rather than agents’ wishful thinking, so that tribunals can make decisions that can be backed up, and renters can make informed decisions about challenging increases. This is one reason why we need the forthcoming private rented property database to record the rent being charged at each property and feed this into the tribunal so that renters don’t get overcharged whenever landlords and letting agents are being overly optimistic.
But even with more reliable data and better awareness, it will still be possible for rents on new tenancies to rise faster than our incomes. That means it will still be possible for the tribunal to slap you with a rent increase so big that you can no longer afford to live in your home. That can in no way be described as security of tenure, which is why we ultimately need to see caps on rent increases based on the lower of wage growth and consumer price inflation.
