Annual rental inflation reached its highest level in nearly two years in June, according to the latest Goodlord Rental Index, climbing to 6.5% having remained at a 10-month low throughout April and May.
For the first time this year, June's Index sees annual rent increases outstripping wider inflationary metrics. The first five months of the year saw historically low inflation across the private rented sector, as landlords, letting agents, and their tenants awaited the impact of May's Renters' Rights Act.
While it's too early to say for certain, June's figures may represent the first evidence that the disruption many experts anticipated is starting to hit the market.
The Goodlord Rental Index is based on thousands of verified tenancy transactions each month, capturing actual rents paid rather than estimates based on listings or advertisements. This means the figures reflect confirmed tenant contracts, excluding marketing inflation or aspirational pricing on property listings.
Annual rent inflation jumps to highest level in almost two years
In June 2026, the average cost of a rental property in England stood at £1,309, a 6.5% increase on the average price recorded twelve months earlier, when rents stood at £1,229. This represents a major deviation from trends seen throughout the year so far. In both April and May, annual rental inflation stood at just 1.7%.
June's 6.5% annual rent inflation is more than double the 3% Consumer Price Inflation recorded by the ONS in May, and sees rents rising at a much higher rate than wages, which grew by 3.4% last month.
Some had suggested that the cooler market seen up until May was a sign that stakeholders were in a holding pattern ahead of the Renters' Rights Act coming into force. With year-on-year rental inflation now jumping to levels not seen since August 2024, those claims could well be ringing true.
It remains to be seen whether this marks a one-time recalibration, or the early stages of the wider market turbulence many predicted the legislation would bring.
Month-on-month rents see biggest spike since July 2025
Following months of relative stagnation, rents rose 8.1% in June compared with May. The average monthly cost of a new tenancy grew from £1,211 in May to £1,309 in June, marking the largest month-on-month increase since last summer, when rents jumped 17.7% between June and July 2025. Average monthly rents in England are now at their highest level since September 2025, when they stood at £1,389.
Rents increase across every region in England
Rents increased both year-on-year and month-on-month across every region in England in June. The largest annual increase came in Yorkshire and the Humber, where rents were up 16% since June 2025.
The South West and North East each recorded annual rental inflation of 10% or above, while the East Midlands saw a year-on-year increase of 7.7%.
Having topped the charts for annual rental inflation in both April and May, London recorded a comparatively modest annual price increase of 5.6% in June. On a month-on-month basis, the South West saw by far the largest increase, with rents up 29.5% between May and June.
The North East saw rents jump 15.7% month-on-month, while Yorkshire and the Humber recorded a rise of 12.6%. The smallest monthly increase came in the West Midlands, where rents were up just 0.5% from May to June.
While the market took time to adjust to its new reality in May, these figures could suggest stakeholders are now actively responding to the changes brought about by the Renters' Rights Act. Only time will tell whether June's Index is an outlier or a sign of things to come.
William Reeve, chief executive of Goodlord, believes the figures may mark a turning point. "These figures show a stark shift away from the trends we've seen throughout 2026 so far," he says.
"After months of warnings about the potential consequences of the Renters' Rights Act, June's Index may well give us an indication of the impact it's starting to have on the ground. We always expect rents to pick up across the summer months, but to see year-on-year inflation hit a near two-year high suggests a clear turning point in what has thus far been a cool market in 2026.
"One possible explanation for June's spike in rents is the change the RRA has brought to landlords' ability to increase rents during tenancy," he continues.
"With landlords now only allowed to raise rents once a year via Section 13, there's a clear incentive to begin new tenancies at higher rates than they may have previously. The coming months will reveal whether June's figures mark a one-time recalibration of the market, or the beginning of a new normal across the PRS."
