Rents hit record high as UK rental supply falls

UK rents have climbed to a new record high, and the reason is not complicated: there are fewer homes to rent than there were a year ago, and the number is still falling. New figures published this month show the first drop in rental supply in three years, reversing a trend that had been slowly easing pressure on tenants since 2023. For landlords and tenants alike, it is worth understanding what changed, why, and what it means for the months ahead.

The headline numbers

The average UK rent for a new letting reached £1,343 a month in September 2026, the highest figure on record. Rents rose by around 4.1% in the year to August, and forecasters now expect growth of between 4% and 5% by the end of 2026. London remains the most expensive market by some distance, with average rents there passing £2,200 a month.

Behind the price rise sits a supply story. The number of homes available to rent is now around 3% lower than a year ago, the first annual fall since 2023. Competition for the homes that are available has also picked up, with agents reporting an average of 5.3 enquiries for every listing, the highest level in almost two years.

Why the supply squeeze is happening

Three things are combining to shrink the pool of rental homes.

1. Landlords are leaving the sector: Rising costs, higher mortgage rates on buy-to-let borrowing, and a steady run of new compliance rules have made letting less attractive for some smaller landlords, who are selling up rather than reinvesting.
2. Build to rent has slowed sharply: New construction starts in the build-to-rent sector, which has been a major source of new rental stock in recent years, fell by around 79% in the year to June 2026 as developers pulled back amid higher borrowing costs.
3. Fewer homes are moving from sale to let: With the sales market also under pressure, fewer landlords are buying new properties to add to their portfolios, so the usual flow of homes into the rental sector has slowed.

None of this is happening in isolation. Landlords have absorbed a lot of change over the past couple of years, from the end of Section 21 and the shift to periodic tenancies under the Renters' Rights Act, to new safety and licensing requirements. For some, the cumulative cost and administrative load has tipped the balance towards selling rather than continuing to let.

What it means for tenants

For renters, less choice and higher prices are already being felt. Tenants are now spending an average of 32% of their income on rent, rising to almost 40% in London. With enquiries running higher per listing, good properties are being let quickly, sometimes within days.

A few practical points are worth keeping in mind. First, budget realistically for rent increases at renewal rather than assuming last year's rate still applies. Second, move quickly once you find a suitable property and have your references, deposit and right to rent documents ready in advance. Third, know your rights: since the end of Section 21, landlords can no longer evict a tenant without a specific legal reason, which gives renters more security once they are in a tenancy, even if finding one has become more competitive.

What it means for landlords

The flip side of a supply shortage is strong demand. Landlords who remain in the market are generally seeing shorter void periods, more applicants to choose from, and rents that keep pace with, or beat, inflation. That is a meaningful change from a few years ago, when landlords in some areas struggled to fill properties quickly.

The trade-off is that compliance still matters more than ever. With the sector under political and media scrutiny, landlords need to keep on top of safety certificates, deposit protection, and the tenancy changes introduced by the Renters' Rights Act. Cutting corners is far more likely to be noticed, and penalised, in a market this closely watched. For landlords weighing up whether letting still stacks up against selling, it is worth running the numbers properly rather than reacting to headlines about an exodus.

What landlords and tenants should do next

If you are a landlord with a property to let, this is a strong market to be in, provided you price it sensibly and keep your compliance paperwork in order. Moovehub's tenant find service can help you get a well-referenced tenant in place quickly without paying a percentage-based agency fee, and the fully managed service takes the day-to-day compliance and maintenance off your hands if you would rather not manage a tenancy yourself. If rising costs and regulation have you leaning towards exiting the rental market instead, our team can also help you sell your home for a flat fee, with no estate agent commission to factor in.

If you are a landlord who wants a fuller picture of the rules that have shaped this market, our guide to the Renters' Rights Act and our letting agent checklist cover what to have in place before you advertise a property.

If you are a tenant, our guide to your rights since Section 21 was abolished explains what protection you now have once a tenancy is signed, even in a market where finding a home to rent takes more effort than it used to.

The rental market has shifted in landlords' favour for now, but it is built on a supply problem that is unlikely to resolve itself quickly. Whichever side of a tenancy you are on, planning ahead and keeping good records will matter more than ever over the next year.