Rental market continues to recalibrate following Renters’ Rights Act
Average rents rose 0.5% in May compared to April, when prices had fallen for the first time this year, however year-on-year growth remained subdued at 1.7%.
Meanwhile, prices remain lower in May than in March for the first time since 2020, according to the latest Goodlord Rental Index.
The year-on-year rate follows April’s lowest year-on-year rental inflation – also 1.7% – in nine months since July 2025, more than half of May 2025’s year-on-year rental growth of 3.6%.
Rental inflation below key measures
In May 2026, the average cost of a rental property in England was £1,211, a 1.7% increase on the average price recorded twelve months ago (May 2025), when rents stood at £1,191 per property.
The latest figure shows that rental inflation is continuing to sit below the most recent inflation figure of 3% and wage growth of 3.4%.
The month-on-month increase, from £1,205 in April to £1,211 in May, represents a 0.5% increase and has largely been driven by rents bouncing back across Yorkshire and the Humber and the North East.
Regional differences
The North East previously saw rents fall 4.9% in April, but they rose 5.5% in May. Meanwhile, Yorkshire and the Humber saw a 3.2% increase in May, up from a 2.8% fall the month before.
Greater London, the South East and the West Midlands all saw marginal month-on-month increases, with Greater London rents up 5.6% in the twelve months to May 2026, rising from £2,077 to £2,194 – up from April’s 4.8% month-on-month increase.
Meanwhile, rents across the East Midlands, East of England, South West and North West were lower in May than in April.
William Reeve, CEO of Goodlord, said that a month after the Renters’ Rights Act launch, the market was still adjusting. “Whether the new legislation will bring the widespread disruption and price volatility many have predicted remains to be seen. Nonetheless, the overall picture is one of a rental sector that has fundamentally changed.
“While average prices have recovered slightly from their drop in April, this is the first time since 2020 that rents in May have been lower than they were in March. These figures reflect a market being pulled in two directions: on one hand, reduced net migration is easing demand-side pressure; whilst the Renters Rights Act and continued underdelivery in housebuilding, particularly in London, is constraining supply on the other. How these forces play out over the coming months will be critical in determining the trajectory of rental prices.”