Annual rental growth for newly let homes has returned to positive territory for the first time since June, with landlords now facing the Renters’ Rights Act implementation in less than 50 days.
Newly agreed rents across Great Britain rose 0.6 percent year-on-year to £1,368 per month in February, ending a seven-month stretch of annual declines, according to lettings agency Hamptons.
London leads rental recovery
London has emerged as the driver of the rebound, with rents in the capital rising 1.0 percent over the last 12 months – the first positive annual growth in 13 months. Inner London performed strongest, posting 2.6 percent growth.
This marks the first time in 27 months that rental growth in London has outpaced the rest of the country. In October 2023, London rents were rising at close to double-digit pace at 9.6 percent, compared with 8.0 percent elsewhere.
This follows Residential Landlord’s analysis of regional rent trends, which found Belfast leading a five-year surge in city rents. The latest Hamptons data confirms that while growth has moderated significantly from 2023 peaks, supply constraints continue to support rental values in key markets.
Supply squeeze persists in capital
Rental supply in London remains tight despite broader market cooling. The number of homes available to rent in the capital is down 42.4 percent compared with the same period a decade ago – exceeding the 25.4 percent national decline. Outer London has seen an even steeper fall of 50.7 percent.
Outside London, annual growth picked up across most regions. The three northern regions returned to 1.0 percent growth for the first time since June 2025, while the Midlands saw its highest growth since August 2025. The North West recorded the strongest regional growth outside London at 2.2 percent.
Meanwhile, the cost of renewing a tenancy rose 2.2 percent year-on-year – the slowest pace since September 2021. Over the past five years, renewal costs have increased 24.7 percent.
Aneisha Beveridge, head of research at Hamptons, said: “With D-Day for the Renters’ Rights Act now less than 50 days away, rental growth has started to creep up. But awareness of the many upcoming changes remains relatively low among landlords, and so far there have been few signs that landlords are looking to push up rents specifically ahead of 1 May.
“Whether the Renters’ Rights Act proves to be inflationary for rents will ultimately depend on how well it works in practice for landlords.”
Opinion
The return to positive rental growth feels more like stabilisation than resurgence. Landlords have spent months absorbing regulatory uncertainty and tax changes – the market appears to be finding its floor. The gap between new let prices and renewal costs suggests existing tenants are getting better value than new renters facing the open market. Whether that floor holds after 1 May depends entirely on how quickly the new possession grounds prove workable in practice. For landlords letting in London, the supply squeeze continues to support values despite the broader cooling trend.
