Rents Are Rising Sharply After the Renters' Rights Act — Here's What It Means for Landlords and Tenants

The UK rental market has just delivered its biggest surprise of the year. New industry figures show that rents across England rose sharply in June 2026, with annual rental inflation reaching its highest level in almost two years.

The timing is significant. The Renters' Rights Act — the most substantial reform to the private rented sector in decades — came into force in May, and many experts predicted it would cause a period of adjustment across the market. June's figures may be the first real sign of that disruption taking hold.

At Capital, we have been part of the East London property market for over 25 years, and we know that headline figures like these can cause concern for landlords and tenants alike. In this post, we break down what the latest data actually shows, why rents may be climbing now, and what it could mean for you — whether you let a property, rent one, or are thinking about your next move.

Annual Rent Inflation Has Hit a Near Two-Year High

For most of 2026, rental growth had been unusually calm. Throughout April and May, annual rental inflation sat at just 1.7% — historically low for the private rented sector. Then, in June, the picture changed dramatically. Year-on-year rental inflation jumped to 6.5%, according to Goodlord's monthly rental index, taking the average cost of a rental property in England to £1,309 per month, up from £1,229 a year earlier.

To put that in context, rents are now rising at more than double the rate of consumer price inflation and well ahead of wage growth. For tenants, that means renting is becoming more expensive in real terms. For landlords, it reflects a market that is repricing quickly — and one that needs careful navigation.

The Biggest Monthly Jump in Almost a Year

The month-on-month figures are just as striking. Between May and June, average rents in England rose by 8.1% — the largest single monthly increase since last summer. The average monthly cost of a new tenancy climbed from £1,211 in May to £1,309 in June, putting rents at their highest level since September 2025.

Monthly figures can be volatile, and summer months often bring seasonal demand as tenants look to move. However, a jump of this size, immediately after major legislation took effect, suggests something more than seasonality may be at play. Industry analysts have noted it is too early to say whether this is a one-off recalibration or the start of a longer period of market turbulence — but it is certainly a trend worth watching closely.

Rents Rose in Every Region — Including London

June's increases were not confined to one part of the country — rents rose both annually and month-on-month in every English region. Yorkshire and the Humber saw the largest annual increase at 16%, while the South West and North East both recorded annual growth of 10% or more.

Here in the capital, the picture was slightly more measured. London recorded annual rental inflation of 5.6% in June — notable, given London had actually led the country for rental inflation earlier in the spring. While London's rise is below the national average this time, the direction of travel is clear: demand remains strong, supply remains tight, and rents across the city continue to climb. For East London landlords and tenants, staying informed on local market conditions has rarely been more important.

Is the Renters' Rights Act Behind the Rise?

The Renters' Rights Act came into force in May 2026, bringing sweeping changes to how tenancies operate in England. In the months leading up to it, rental inflation was unusually subdued, as landlords, agents and tenants waited to see how the new rules would bed in.

June's sharp rise may be the first evidence of the market actively responding to the new legislation. Some landlords may be repricing properties to reflect changed risk and compliance costs, while others may be reassessing whether to remain in the sector — which can reduce supply and push rents higher. It is important to stress that one month of data does not make a trend, and it remains to be seen whether this is an outlier or a sign of things to come. Landlords should consider seeking professional guidance before making significant decisions, and it is important to check that any rent adjustments comply fully with the new framework.

What This Means for Landlords and Tenants

For landlords, a rising rental market can be positive news for returns — but it comes with responsibilities. The Renters' Rights Act has changed the rules around tenancies, rent increases and possession, and getting things wrong can be costly. Reviewing your rent against the local market, ensuring your paperwork is compliant, and working with an experienced managing agent are all sensible steps in the current climate.

For tenants, sharp rent rises make it more important than ever to understand your rights, budget carefully, and act quickly when the right property becomes available. Well-priced homes in East London are letting fast, and being prepared — with references and finances ready — can make all the difference.

Conclusion

June 2026 may prove to be a turning point for the rental market. After months of unusually low rental inflation, rents in England jumped sharply — rising 6.5% year-on-year and 8.1% in a single month — just weeks after the Renters' Rights Act came into force. Every region saw increases, and while London's growth was more moderate at 5.6%, the wider trend points to a market in active adjustment.

Whether this is a temporary recalibration or the start of sustained turbulence, one thing is clear: both landlords and tenants need reliable, up-to-date advice to navigate the months ahead. With new legislation reshaping the sector, staying compliant and staying informed go hand in hand — and having experienced professionals on your side has never mattered more.

Concerned about what the Renters' Rights Act means for your rental property? With over 25 years of experience in the East London property market, Capital — the property professionals — can help you review your rent, stay compliant and manage your property with confidence. Get in touch with our team today, or follow us on Instagram @capital_estates for the latest market updates.

Source: Letting Agent Today — “Shock leap in rent levels as Renters Rights Act disrupts market” (July 2026): https://www.lettingagenttoday.co.uk/breaking-news/2026/07/shock-leap-in-rent-levels-as-renters-rights-act-disrupts-market/

This article is for general information only and does not constitute legal or financial advice. Landlords and tenants should seek professional advice regarding their individual circumstances.