Rents climb to highest level in two years

Rental inflation has hit its highest level in two years, with a firm blaming the Renters’ Rights Act for the rise.

Goodlord’s latest rental index shows June recorded the highest year-on-year rental inflation since August 2024, rising to 6.5% after holding at a 10-month low in April and May.

Average rents in June also rose to £1,309, the highest recorded since September 2025, and £80 higher than a year earlier.

Surge in rents

William Reeve, CEO of Goodlord, explains the surge in rents could be down to the impact of the Renters’ Rights Act.

He said: “These figures show a stark shift away from the trends we’ve seen throughout 2026 so far. 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 Renters’ Rights Act has brought to landlords’ ability to increase rents during tenancy. 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 private rented sector.”

Rents increased every region in England

According to the data, 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 increasing at a much higher rate than wages, which grew by 3.4% last month.

Rents increased both year-on-year and month-on-month across every region in England in June.

The largest year-on-year 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%.

In terms of month-on-month changes, the South West saw by far the largest increase, with rents down south 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 0.5% from May to June.