Why Are UK Rents Rising Again in 2026?
September 15, 2026
UK rents are starting to climb more quickly again, and I think the reason is easier to understand when you look at both sides of the rental market. Providing a rental home has become more expensive, while higher mortgage costs are also making it harder for some tenants to become homeowners. That combination puts pressure on the homes available to the next person looking for somewhere to live.
I’m a landlord and a tenant myself, so I don’t see this as a story where one side automatically wins and the other loses. Tenants need enough choice to make landlords compete. Landlords need a return that makes continuing to provide those homes worthwhile. A healthy rental market needs both.
In my September 2026 video, I looked at the latest rental figures and explained what they mean for my own investment decisions. My view is that policy needs to take the effect on supply much more seriously.
You can also watch my original video about rising UK rents.
What the latest rental figures actually show
Zoopla’s September 2026 Rental Market Report puts the average monthly rent for a new let at £1,343, which I rounded to about £1,340 in the video. It reports annual growth of 2.6% in July, up from 1.6% in February, and forecasts annual growth of 4% to 5% by the end of 2026.
Those figures concern new lets. They don’t mean every existing tenant has just received the same increase. They also shouldn’t be mixed indiscriminately with another index covering a different set of tenancies. The forecast describes a possible year-on-year growth rate at year-end, rather than another guaranteed 5% rise from today’s level.
To make the scale tangible, 5% of £1,340 is £67 a month. That’s an illustration of the size of a 5% change, not a prediction of the bill for an individual tenant. For someone already trying to cover living costs and build a deposit, even that sort of increase matters.
The report also says the number of available rental homes is 3% lower than a year earlier. That helps explain the renewed pressure, although a national figure won’t tell you exactly what’s happening on one street.
Higher mortgage costs squeeze the landlord’s margin
I’ve felt the borrowing-cost change very directly. Across my portfolio, I have around £2 million of mortgage debt. Moving from an average cost of roughly 3% towards 6% represents about £60,000 a year of additional interest, or £5,000 a month.
That’s a large amount of money coming out of the same portfolio. It helps explain why I pay attention to the amount left after costs, rather than celebrating the rent coming in. A higher rent can still leave less profit if the cost of providing the property has risen faster.
The calculation is simple: a three-percentage-point difference on £2 million is £60,000 annually. It illustrates my overall exposure, rather than implying every loan changed rate on the same day. Mortgages come up for renewal at different times, and the terms available vary.
I’m far from the only investor facing that pressure. When a previously comfortable margin becomes much smaller, the decision about buying another rental changes. The rent might look attractive in isolation, but the investor has to compare it with finance, repairs, management and the capital required to buy.
My worked example of how much profit £1,000 rent leaves shows how quickly those deductions change the headline number. It’s the same discipline I apply when a report tells me rents are rising.
Higher rates can also keep tenants renting for longer
There’s another part of the mortgage story that struck me when reading the report. Higher borrowing costs affect people trying to leave the rental market as well as the landlords supplying it.
Imagine a couple who have spent years saving £30,000 or £40,000. They find a house, speak to a broker and discover the monthly mortgage payment is more uncomfortable than they expected. They may decide to wait, save a little more and see whether borrowing becomes cheaper.
That can be a sensible decision for them. But the rental property they already occupy doesn’t become available to the next household. If lots of would-be buyers make a similar choice, the flow of homes coming back onto the rental market slows.
It’s useful to think about that separately from the total number of rental properties. Even without a home being sold, fewer moves can mean fewer available listings at a particular moment. Someone looking for a tenancy experiences the homes they can actually choose from, rather than the entire stock on a national spreadsheet.
This is why I don’t think we can talk about the rental market without talking about the wider housing market. Buying and renting are connected. Make the transition into ownership harder and the effects can be felt by people who weren’t planning to buy at all.
My concern about regulation and investment
I’ve got no issue with proper standards. Someone is paying me to provide their home. Gas safety, electrical safety, maintenance and a property that is fit to live in are part of that responsibility. A decent landlord should accept that.
My concern is the combined effect of more administration, more costs and less return on the decision to invest. When I’m considering putting £50,000 or £100,000 into a purchase, I have to ask how much work is involved, what risk I’m taking and what the money is likely to produce.
In the video I discuss the Renters’ Rights changes, the landlord database and licensing as examples of the growing policy and administrative burden in England. Those measures have different scopes and implementation timetables; they shouldn’t all be treated as one identical new bill already due from every landlord. I’ve covered the landlord database and its potential effect on costs and rents separately.
My argument is about incentives. If an investment becomes less attractive, some investors will accept the lower return, some will look for a cheaper purchase, and some will put their capital elsewhere. If less money goes into providing rental homes while demand remains strong, tenants can face less choice.
That’s my interpretation of the policy risk. The rental report doesn’t prove that one political party or one rule caused a particular percentage increase. Mortgage costs, local supply, household decisions and affordability all matter. I can be critical of government policy without pretending that a complicated market has only one cause.
Stamp duty changes how much capital a deal needs
Purchase taxes are another part of the decision. The additional-property SDLT surcharge in England and Northern Ireland increased from three to five percentage points in October 2024. On a £150,000 purchase, that two-point increase alone represents another £3,000 of capital required.
The 5% additional element is £7,500, but it’s important to distinguish that from the complete bill. Under current standard bands, a £150,000 additional residential purchase would generally attract £8,000 in SDLT before any further surcharge or applicable relief: £6,250 on the first £125,000 and £1,750 on the remaining £25,000.
That example assumes the ordinary higher-rate treatment and no extra non-resident surcharge. Individual circumstances can change the answer, and Scotland and Wales have different transaction taxes. The government’s residential SDLT rates are the official reference for checking the calculation.
For me, the investment point is that this money sits alongside the deposit, legal fees, mortgage fees and any refurbishment. It doesn’t directly produce extra rent. If I have to commit more cash to produce the same annual surplus, my cash-on-cash return falls.
I can respond by negotiating harder, accepting less return or deciding the deal doesn’t work. I can hope for higher rent, but hope isn’t a substitute for what a tenant will actually pay in that location.
Can landlords simply pass every cost on to tenants?
There’s a limit to what any individual landlord can charge. In the video, I use a simple comparison: if my property is advertised for £1,400 and there are 20 similar properties available for £1,300, I’m going to struggle to get my price. I need to improve what I’m offering or reconsider the rent.
That’s competition doing something useful for the tenant. My own mortgage bill doesn’t entitle me to ignore the alternatives. If people can get an equivalent home for less, they have a reason to choose it.
Now reverse the situation. If there’s only one suitable property and lots of households want it, the balance changes. That’s why supply matters so much to my argument. Costs can affect tenants indirectly by making it less attractive to provide additional homes, rather than being passed through automatically pound for pound.
Affordability still matters too. Tenants have budgets, and a market can’t indefinitely demand money people don’t have. A national forecast is no substitute for checking local demand and what comparable homes actually achieve.
Why rising rents don’t automatically make buy-to-let a good deal
My own rents have increased significantly, which has helped offset the increase in mortgage interest. I’m pleased to have that income, but I still look at what’s left after everything has been paid.
If I’m buying another property, I want it to work using today’s achievable rent and today’s borrowing costs. If rents then rise by 4% or 5%, that can improve the result. I don’t want the future rise to be the thing rescuing an otherwise weak purchase.
I also want to know what happens if the expected increase doesn’t arrive. Can I still maintain the home properly? Can I cope with an empty period? Is there room for the mortgage to cost more at renewal? Those questions are more useful to me than assuming a rising national average makes every rental attractive.
A strong investment still needs the right purchase price, an appropriate property and enough margin. The wider rental story provides context for those decisions, but I have to do the work on the individual deal.
What I want to see in a healthier rental market
I’d like tenants to have more genuine choice and landlords to have a reasonable incentive to invest. Those aims can support each other. More suitable homes mean competition, while a sustainable return encourages people to keep providing and improving them.
That’s the point behind my frustration with policies that focus only on squeezing the landlord’s return. The effect doesn’t necessarily stop with the landlord. We need to ask what happens to the next rental home that might otherwise have been bought, improved and offered to a tenant.
If you’re thinking about investing, start with the numbers you can support now. You can book a free 20-minute strategy call to discuss your plan, look at the Starter Club for your next steps, or explore Done For You. Rising rents are useful context; a properly assessed deal is what I want to own.