Landlords are scaling back their plans to raise rents, though those who do intend to press ahead are targeting increases that remain well above historic norms, new research has found.

The latest Landlord Trends report from mortgage market specialist Pegasus Insight shows that 61% of landlords plan to raise rents in the next 12 months, down from 78% a year ago. For those anticipating increases, the average rise forecast is 6%, up from 5% in the second quarter of 2024.

ONS figures published earlier this month confirmed the strength of the rental market, with average UK private rents climbing 5.7% in the year to August 2025, reaching £1,348 a month.

COST PRESSURES AND AFFORDABILITY

Although fewer landlords are set to raise rents, the scale of intended increases suggests many have yet to feel relief from rising costs. Maintenance, compliance and mortgage servicing remain the most common reasons cited, pointing to continued pressure on landlord margins.

At the same time, Pegasus Insight’s analysis suggests that many landlords are becoming more cautious about affordability constraints. Having already adjusted rents to reflect higher costs, some now appear wary of driving tenants away or risking longer voids by pushing levels further.

LEGISLATIVE UNCERTAINTY

The looming Renters’ Rights Bill is also shaping behaviour. The legislation, expected to receive Royal Assent by November, will introduce limits on rent increases to once a year, abolish Section 21 and move to open-ended tenancies.

Implementation is likely from mid-2026, but many landlords are acting in advance to secure sustainable rent levels before the new framework takes effect.

Mark Long, founder and director of Pegasus Insight, said: “Landlords remain under pressure from higher costs and policy change, and the instinct to raise rents remains strong. But our research shows that the market may be reaching an affordability ceiling.

“When rent levels rise too far, demand can falter – this is price elasticity in action, and many landlords recognise that pushing further risks losing tenants or facing longer voids.

“At the same time, the forthcoming Renters’ Rights Bill is influencing decisions now. 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.”