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Rental Pressures Rise Amid Sales Jitters

  • Writer: Sarah Ruivivar
    Sarah Ruivivar
  • May 6
  • 2 min read

The rental market is about to get even more interesting!


Despite a slight dip in rental forecasts, the pressure on rents shows no sign of easing. The economic ripples from the Iran War are making waves in the housing market, pushing cautious buyers to rent for longer.


Knight Frank has trimmed its house price growth prediction for 2026 to a modest 1.5%, while also slightly lowering rental forecasts. However, the introduction of the Renters’ Rights Act on May 1 is expected to turbocharge rental prices, with a predicted growth of 4% this year and 3.5% next year.


Tom Bill, the head honcho of UK residential research at Knight Frank, notes that landlords will likely seek compensation for the added risks posed by the new act. From repossession hurdles to setting rents, landlords are bracing for a bumpy ride.


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In London, the rental growth forecast is particularly spicy, with predictions of a 3.5% annual increase in prime areas. As more landlords exit the scene, supply is tightening, especially in the capital.


The rental market is also benefiting from a buyer's hesitation to commit, with higher borrowing costs and geopolitical uncertainties keeping potential homeowners on the fence. Some folks are even making a temporary return to London from the Middle East, adding more fuel to the rental fire.


So, whether you're a landlord, agent, or investor, it’s time to keep a keen eye on these evolving dynamics. The rental market rollercoaster is far from over!


Want to hear more? Join Mal & Matt on the Property AI Report Podcast each week!

Access from your preferred podcast provider by clicking here



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