Landlords push asking rents higher as tenant demand surges

The Renters’ Rights Act has led to landlords increasing asking rents to test the market, claims an estate agent.

Chestertons’ lettings report for July reveals a surge in tenant demand after the act was passed, while landlords appear to be testing how far they can push asking rents in a stronger rental market.

The Renters’ Rights Act came into force on 1 May 2026.

Landlords becoming more confident

Chestertons says Rightmove’s rental trends tracker reveals that asking rents increased by 2.9% year-on-year in the second quarter, up from 1.4% in Q1 and marking the strongest rate of growth in two years.

The estate agent explains that the ban on landlords requiring rent to be paid in advance could have contributed to some landlords increasing their asking rents, as they look to maximise their monthly rental income under the new rules.

However, the market now seems to be showing signs that landlords are becoming more confident in their initial asking prices.

In May, the first month under the new rules, the number of landlords reducing asking rents fell sharply, down 36% year-on-year, after several months in which a growing proportion had lowered rents.

Although June saw a partial reversal, with rent reductions increasing by 6% year-on-year, July recorded an increase of just 1%, indicating that landlords are becoming more confident in their initial pricing and are less likely to reduce rents to secure a tenant.

Katinka Hill, head of lettings at Chestertons, said: “Activity seen immediately after the legislation was introduced in May eased off in July, however in the first ten days of August our branches have seen applicant registrations up 18% year-on-year which is in line with the seasonal summer uptick we would expect at this time of year.”

Restore buyer confidence

In the sales market, the number of prospective buyers registering across Chestertons’ London-wide network fell by 22% year-on-year to 1,740 in July, marking the steepest decline since November, when registrations dropped by 29% immediately ahead of the Budget.

The estate agent said the fall came amid mounting speculation over who would replace Sir Keir Starmer and what a change of leadership could mean for property taxation.

Adam Jennings, head of residential at Chestertons, said new Prime Minister Andy Burnham’s immediate response to the Stamp Duty speculation should help restore buyer confidence.

He said: “The clarity provided so quickly into Andy Burnham’s tenure should, in theory, help people who are thinking of buying.

“The lesson from last year was that people don’t want to make a big decision in uncertain times when so much money is at stake. Inevitably, they are inclined to ‘wait and see’.

“By ruling out changes to Stamp Duty in the upcoming Budget, the Prime Minister has removed a significant question mark for buyers. Hopefully, that position remains in place for at least the next 12 months and gives the market the certainty it needs.”