Fewer landlords planning rent rises, but increases remain significant – Pegasus

Landlord research carried out by mortgage market specialist Pegasus Insight shows that while the majority of landlords still expect to increase rents in the year ahead, fewer are planning to do so compared with a year ago.

The latest Landlord Trends report (Q2 2025) reveals that 61% of landlords plan to raise rents in the next 12 months, down from 78% a year ago. For those intending to increase rents, the average anticipated rise is 6%, compared with 5% in Q2 2024. Those expectations were closely mirrored by official data: the Office for National Statistics reported earlier this month that average UK private rents continued to rise strongly in the year to August 2025, climbing 5.7% to £1,348 a month.

Although fewer landlords now intend to raise rents, those who do are planning increases that remain significant by historic standards. This pattern suggests the market is reaching a natural limit: many landlords have already adjusted rents to current market levels, while others are increasingly mindful of tenant affordability constraints. Running costs, from maintenance and compliance to mortgage servicing, remain the most frequently cited driver of planned increases, underlining the continued squeeze on landlord margins.

The looming Renters’ Rights Bill (RRB) is also likely to be a factor. The legislation will introduce limits on rent increases to once per year, alongside wider reforms such as the abolition of Section 21 and the move to open-ended tenancies. With Royal Assent expected by November and implementation likely from mid-2026, many landlords appear to be acting pre-emptively, ensuring their rent levels are sustainable before the new framework takes effect.

Mark Long, founder and director of Pegasus Insight, said: “Landlords remain under pressure from higher costs and policy change, and the instinct to raise rents remains strong. But our research shows that the market may be reaching an affordability ceiling. When rent levels rise too far, demand can falter – this is price elasticity in action, and many landlords recognise that pushing further risks losing tenants or facing longer voids.

“At the same time, the forthcoming Renters’ Rights Bill is influencing decisions now. With annual rent increase limits and tribunal challenges on the horizon, landlords are reviewing their portfolios carefully. This is a delicate period for the Private Rented Sector: if costs keep rising as regulation tightens further, we may see a fresh wave of rent inflation despite the moderation in intentions revealed by our latest research.”