Renting in 2026: What Landlords and Tenants Need to Know About the Property Market and New Reforms

The UK property rental sector is entering 2026 in a distinctly different landscape—moderated rent growth, evolving market dynamics, and the dramatic reform of tenancy law via the Renters’ Rights Act. Whether you're a landlord, tenant, or property professional, staying informed has never been more crucial.

Rental Market Outlook: A Cooling but Stable Environment

Following a surge in 2025, with rental supply up 15% year-on-year by Q4, UK rent growth is expected to ease into 2026. According to leading forecasts:

New let rents are predicted to rise by just 2–2.5%.
Broader rent growth across all tenancies is forecast at 2.6%.
The national average rent sits at £1,366 per month (ONS, November 2025).

The average time to let a property now stands at just 17 days—evidence of a still-competitive marketplace. Nonetheless, with a more balanced supply-demand equation, bidding wars and steep price hikes are subsiding.

However, landlord confidence faces headwinds. An estimated 39% of landlords are considering selling properties in light of regulatory changes, potentially tightening stock again in the medium term.

Meanwhile, house prices also reflect this moderated momentum, forecast to grow by 2–2.5% nationally in 2026. Regions in the North are expected to outperform.

The Renters’ Rights Act: Major Changes from May 2026

The most transformative change in 2026 is the phasing in of the Renters’ Rights Act, passed in October 2025 and effective from 1 May 2026. Key reforms include:

All new tenancies convert to periodic contracts, eliminating fixed-term assured shorthold tenancies (ASTs).
Section 21 'no fault' evictions will be banned as of 30 April 2026.
Eviction grounds will be reformed for greater transparency and fairness.
Ban on rental bidding and advance rent payment requirements.
Rent increases restricted to once per year.

Important dates for landlords to note:

January 2026: Final regulations to be published.
March 2026: Tenants must be given new government information sheet.
30 April 2026: Last date for serving Section 21 notices.

These changes shift the balance of power toward tenant security and demand proactive planning from landlords.

Property Compliance: EPC, Digital Tax, and Heat Networks

2026 will also challenge landlords with a growing body of compliance requirements. Among the most critical:

Energy Efficiency: New tenancies must achieve at least an EPC 'C' rating by 2028 (2030 for existing). While 55% of landlords plan energy investments, caps and exemptions remain under consultation.
Making Tax Digital: The digitisation of tax returns continues, impacting landlords operating as sole traders.
Heat Networks: From 27 January 2026, landlords offering centralised heating or cooling systems under heat networks must meet new standards.

Residential lease reform progresses too. Commonhold becomes the default for new flats, while leasehold revisions cap ground rents and remove automatic forfeitures for minor breaches.

Commercial Property and Mortgage Moves

Government regulatory focus extends beyond residential. In commercial property, draft legislation due 2027/28 will prohibit upwards-only rent reviews, currently under House of Lords scrutiny.

At the same time, the Financial Conduct Authority continues to review mortgage affordability standards, a move designed to enhance access to homeownership while balancing lender risk.

What This Means for Landlords & Tenants

Rental market stability presents both opportunities and challenges. Professionalism and preparation are key:

Landlords should act early to ensure compliance, explore EPC upgrades, and understand the implications of periodic tenancy.
Tenants will benefit from stronger protections and improved transparency but should still act fast in competitive markets.

Ultimately, 2026 marks a turning point. As the UK rental sector evolves, informed and proactive stakeholders will navigate it best.

*Sources: Office for National Statistics, Zoopla, Savills, HM Government, FCA, Property Market Analysts (2025 data)*