Data from Hamptons, drawing on Connells Group lettings activity, reveals a notable drop in the proportion of tenants facing rent increases in the immediate aftermath of the Renters’ Rights Act coming into force. This suggests landlords are initially cautious, likely recalibrating their rent review strategies to comply with the new legal framework.
However, the reduction in frequency of rent hikes does not necessarily mean overall rental inflation has eased. Early indications point to landlords potentially compensating by applying larger increases when they do adjust rents. This pattern aligns with a strategic shift to maximise returns within the boundaries set by the legislation, rather than a wholesale cooling of the rental market.
For investors, this highlights a nuanced risk profile. Short-term stability in rental income may be offset by volatility and higher increments at review points. Portfolio planning should factor in this potential for step changes, especially in areas with strong rental demand where landlords have greater pricing power.
The Renters’ Rights Act introduces more landlord accountability and tenant protections, but the data suggests it has not yet reduced pressure on affordability. Monitoring rent review behaviour over the next 12 months will be key to understanding the Act’s real impact on rental growth trajectories.
Source: https://propertyindustryeye.com/fewer-rent-hikes-after-renters-rights-act-launch-but-bigger-increases-may-be-coming/
