The Renters’ Rights Act is proving counterproductive for tenants, according to Knight Frank, which says it has resulted in higher rents and reduced the supply of homes available to rent.
The rule changes were brought in on May 1st to give tenants greater rights and protect them from excessive rent rises. Knight Frank, however, says the ban on rental bidding, restrictions on rent paid in advance and limits on rent increases are having the opposite effect.
At the same time, the additional regulation is contributing to some landlords selling up, further reducing the number of properties available to rent. Knight Frank found the number of new rental listings in prime central and prime outer London during the first six months of 2026 was 14% below the five-year average.
Supply shrinking
Although Knight Frank’s research focuses on London, the latest national figures show rental supply is weakening elsewhere too. Rightmove reports that the number of homes available to rent during the second quarter saw the first annual fall since 2022.
And the portal says the decline was primarily due to fewer new properties coming onto the market rather than homes being let more quickly. In the same period, average advertised rents outside London reached a record £1,397 per month, 2.3% higher than a year earlier.
The shortage of rental properties means landlords are increasingly confident they can offset some of the risks created by the new rules by setting higher rents.
Under the Renters’ Rights Act, they can now only increase rents once a year. The ban on rental bidding also prevents them from inviting or accepting offers above the advertised rent.
Asking rents rising
Together, these restrictions mean landlords are having to take extra care when deciding the asking rent.
Mel Constantinou, head of lettings in south-west London and the Home Counties at Knight Frank, says: “Without competitive bidding, some landlords are taking a more confident approach to pricing.
“Whether tenants are prepared to meet higher asking rents depends on how tight supply is in the local area. As the market adjusts to the new rules, setting the right asking rent from the outset will become increasingly important.”
Restrictions on rent in advance
The restrictions on rent paid in advance are creating a different problem. Tenants who previously offered several months’ rent upfront can no longer do so, removing an option frequently used by international students and others without a conventional UK income or credit history.
Jon Reynolds, head of lettings in Knight Frank’s north, city and east London region, says: “International students used to be able to pay a year’s rent upfront. Landlords liked it because of the security it gave them.”
Now, for those unable to meet the standard affordability requirements, the only option is to find a suitable guarantor, which is not always possible.
These changes brought about by the Renters’ Rights Act come at a time when landlords are already having to adapt to increasing tax and regulation, which has led to some deciding to leave the market.
For those who remain, however, the shortage of rental homes combined with strong tenant demand is supporting rental values and increasing yields in many areas.
For tenants, however, the unintended consequence is that measures designed to protect them are making it more difficult to find a home and, when they do, it is likely to be more expensive too.
