Rents look set to rise as tenant demand grows – RICS

Picking up on: “Rising rental values reflect one of the unintended consequences of the Renters Rights Act….“Landlords are setting higher asking rents to reflect the greater risks they face around void periods and rent collection, against the backdrop of lower supply.”

This is true but void periods and rent collection aren’t the only additional risks. There are a lot of additional consequences of labour’s Renters Rights Act. Everything about the Act is inflationary.

Reply to the comment left by Beaver at 10/09/2026 – 09:55
Agreed. However the Renters Rights Act (broadly mimicking the Renting Homes Wales Act without having properly reflected on the consequences of that), is not just the cause of an inevitable inflationary consequence for the PRS. The fundamental issue facing all landlords in the Private Rental Sector now, is that in practice and in reality, there is SIMPLY NO LONGER ANY MEANINGFUL BUSINESS MODEL that fits the business of renting residential property in the private sector. That is because THE RISKS are in reality UNQUANTIFIABLE, and so costs of business risk can not be factored into rental prices. Everyone renting out for any reason other than « invest and hope » (so that would be investors assessing potential returns versus costs and risks, and risk costs as most businesses would do) cannot calculate risk cost anymore. There is no viable maths.

Business minded people know that risk related to anti-social behaviour, unpaid rents or any tenant complaint about conditions (whether genuine or not, their fault or not, or reasonable but hard to rectify or not) has an almost unlimited cost risk, in terms of both time and money. The laws in practice do not have any credible or genuine political or judicial will or interest to function in practice and in reality – such that the costs of relying on either courts, councils or govt to support those new laws are unquantifiable and fuel enormous business risk. The bile-filled rhetoric of left wing political parties against private people or private businesses providing housing for people (regardless of the obvious market need for this facility) makes the business risk even greater. The short term answer for landlords still wanting to stay in the game, has necessarily shifted from providing decent homes, investing in them as assets, and charging a reasonable low rent to retain tenants (sensible and standard business practice), to a totally unnecessary defensive stance of having to increase rents as much as is realistic to cover the risks as much as possible – because the risks are financially unlimited. There is no viable business model – if risks in practice are unquantifiable and unlimited, then business costs are necessarily unquantifiable too – and that means rents have no choice but to move higher.

I am probably getting less than 3%pa return after expenses and paying 60% tax due to only 20% tax relief on interest. The capital values are going down, not up, and likely to continue to go down due to high interest rates, landlords selling off and upcoming EPC changes.

In the meantime, I face the risk of tenants not paying, high fines, criminal record, etc (unlikely, I try to comply with laws, but I could still get tripped up).

I would be better off selling up and investing in a few tracker funds!

Reply to the comment left by Ryden Jones at 10/09/2026 – 10:51
I think that there could still be a viable business model; with maximised rents, via a limited company with ownership offshore. But that doesn’t benefit the UK economy and it doesn’t benefit tenants because it drives competition out of the domestic market and drives rents up by attacking the majority of small portfolio landlords.

Reply to the comment left by Beaver at 10/09/2026 – 11:40
Unlikely to be particularly viable. If a UK company it is likely subject to UK corporation tax as a default. If a foreign company UK residential property income is likely subject to corporation tax, and all profits would be taxable if controlled/managed from the UK.

In addition, it is likely to be problematic getting a mortgage via an overseas company. It may even be an issue getting a bank account!

Reply to the comment left by Ryan Stevens at 10/09/2026 – 11:59The UK government has already CREATED a situation where UK property is held offshore

In fact, the value of UK property held overseas recently reached an all-time high:

https://www.propertyreporter.co.uk/value-of-overseas-held-uk-property-hits-record-high.html

However, the labour government is CREATING a situation where an increasing number of overseas investors need to dump their assets, rather than to continue investing in the UK. And yet, John Healey has just recognised that the only solution to social security and defence security is to grow the economy.