Regulation and rising costs will push rents higher in 2026

Rent rises and increased costs for landlords due to regulatory changes will dominate 2026, according to an estate agent.

Jackson-Stops predicts 2026 will see rent increases as the Renters’ Rights Act comes into force on 1 May 2026.

The estate agents also believe house prices will increase between 2% and 3%.

Cumulative impact of regulatory and cost pressures

Sarah Leslie, lettings Manager at Jackson-Stops Sevenoaks, says 2025 saw some landlords choosing to sell amid mounting cost pressures.

She said: “While rents have remained robust throughout 2025, we are seeing clear price sensitivity among tenants. Properties marketed above the prevailing rate are taking longer to let, whereas correctly priced homes continue to perform well. This trend is evident across all levels, as households remain highly conscious of their budgets.

“While renters are increasingly price sensitive, the lack of supply, particularly for well-located family houses, is continuing to underpin rental values.

“Although some landlords have chosen to sell this year, this cannot be attributed solely to the forthcoming implementation of the Renters’ Rights Act or proposed EPC changes. Rather, it reflects the cumulative impact of regulatory and cost pressures over the past decade.

“For well-prepared landlords working with experienced agents, these reforms are manageable. The changes have, however, reinforced the importance of professional advice, particularly around tenant suitability and compliance.”

Increased costs for landlords in 2026

For 2026, the estate agents predict that as tenant priorities continue to evolve, rents will rise as landlords adapt to ongoing regulatory changes.

Ms Leslie adds: “Tenant priorities have also evolved and we expect these trends to persist into 2026. Demand remains strongest for houses with private outdoor space, alongside properties offering good access to amenities and transport links. With more businesses requiring a return to office-based working, proximity to railway stations has become increasingly important, especially as station parking can be limited and costs continue to rise. As a result, tenants are more focused than ever on value for money.

“Looking ahead, we expect rents to continue rising. Further regulatory changes, including tax adjustments and mandatory landlord registration, will increase costs for landlords, which are likely to be reflected in rental pricing. In this environment, accurate pricing and informed, strategic management will be critical.”

2026 is now expected to mark a return to a more stable housing market

The estate agents also predict house prices will rise between 2% and 3% next year as the UK’s housing market shifts from subdued to steady, and normality resumes for the first time since the pre-Covid era.

Nick Leeming, chairman of Jackson-Stops, said: “Interest rates are expected to settle in the mid-threes, already factored in by many mortgage lenders. This improving outlook is helping to restore confidence across the market. The first quarter of the year is set to be particularly busy, driven by pent-up demand that built ahead of the Budget and is expected to carry through into next year, reinforcing a spring bounce that should be more pronounced than the long-term norm.

“While much of the industry was uneasy about the kite-flying in the run-up to the Budget, the final outcome was better than initially feared. This has created the conditions for an unexpected ‘Reeves rebound’, giving buyers the reassurance they needed to proceed with their plans and move forward.

“Following almost six years of exceptional volatility driven by Covid, fiscal shocks and political uncertainty, 2026 is now expected to mark a return to a more stable and recognisable housing market.”

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