Majority of landlords still expect to increase rents over the coming year, though fewer plan to do so than in 2024, according to new data that underscores persistent cost pressures and looming legislative change.
Majority still eye increases but pace eases
Mortgage specialist Pegasus Insight’s Q2 2025 Landlord Trends report shows 61% of landlords intend to raise rents within 12 months, down from 78% a year earlier. Among those planning hikes, the average expected rise is 6%, slightly higher than last year’s 5%.
Official figures back up the trend: ONS data for August 2025 reports UK private rents up 5.7% year-on-year to an average £1,348 a month. The moderation in landlord intentions suggests many have already brought rents into line with market levels or are wary of tenant affordability constraints.
Costs and compliance drive decisions
Despite the slowdown, landlords cite maintenance, compliance and mortgage servicing costs as the main reasons for raising rents, highlighting the ongoing squeeze on margins.
Mark Long, founder and director of Pegasus Insight, explained: “Landlords remain under pressure from higher costs and policy change, and the instinct to raise rents remains strong. But our research shows the market may be reaching an affordability ceiling. Push too far and demand can falter—this is price elasticity in action.”
New legislation influences early action
The upcoming Renters’ Rights Bill—expected to receive Royal Assent by November and take effect from mid-2026—will limit rent increases to once a year and abolish Section 21 ‘no-fault’ evictions, moving tenancies towards open-ended agreements.
Long added that the legislation is already shaping behaviour: “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.”
