"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"
- Mark Long - Pegasus Insight
Research by mortgage market specialist, Pegasus Insight, shows that while most landlords still plan to increase rents over the next year, fewer intend to do so compared with 2024.
The Landlord Trends report for Q2 2025 finds that 61% of landlords plan to raise rents in the next 12 months, down from 78% a year ago. For those expecting increases, the average rise is expected to be 6%, slightly higher than the 5% reported in Q2 2024. Official data from the Office for National Statistics supports these trends, showing average UK private rents rose 5.7% year-on-year to £1,348 a month as of August 2025.
Drivers and market pressures
Although fewer landlords are raising rents, the anticipated increases remain significant by historic standards. Many landlords have already adjusted their rates to current market levels, while others are more conscious of tenant affordability constraints. Common drivers of rent increases include maintenance costs, compliance obligations, and mortgage servicing, reflecting ongoing pressure on landlord margins.
The upcoming Renters’ Rights Bill (RRB) is also influencing decisions. The legislation will limit rent increases to once per year, introduce open-ended tenancies, and abolish Section 21. With Royal Assent expected by November and implementation likely from mid-2026, landlords appear to be acting proactively to ensure rent levels remain sustainable under the new framework.
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.”
