The proportion of landlords planning to raise rents over the next year has dropped, as growing concerns over tenant affordability begin to influence landlord strategies.
According to the latest Landlord Trends report (Q2 2025) from mortgage market specialist Pegasus Insight, 61% of landlords now expect to increase rents in the next 12 months — down from 78% at the same point last year.
While the majority still anticipate rent rises, the decline suggests a shift in sentiment, possibly signalling that the market is reaching a ceiling on rental affordability.
Among landlords who do plan to raise rents, the average increase is expected to be 6%, up slightly from 5% in Q2 2024. These figures remain in line with broader trends: recent data from the Office for National Statistics shows average UK private rents rose by 5.7% year-on-year to £1,348 in August 2025.
Affordability Limits and Cost Pressures Shape Landlord Decisions
The moderation in planned rent hikes likely reflects two parallel forces: landlords facing rising operating costs and increased sensitivity to tenant affordability.
While many landlords have already adjusted rents to reflect current market conditions, others are becoming more cautious about pricing out tenants, particularly in a climate of stretched household budgets.
Ongoing cost pressures — including maintenance, compliance, and mortgage servicing — remain the most common reasons cited for rent increases, highlighting the persistent squeeze on landlord margins.
The looming Renters’ Rights Bill (RRB) is also likely to be a factor. The legislation will introduce limits on rent increases to once per year, alongside wider reforms such as the abolition of Section 21 and the move to open-ended tenancies.
With Royal Assent imminently and implementation likely from mid-2026, many landlords appear to be acting pre-emptively, ensuring their rent levels are sustainable before the new framework takes effect.
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.”
