Prefer to watch this as a video?
The headlines suggest rents are still rising.
The data tells a more complicated story.
While official figures continue to report annual rental growth, the reality for new tenancies is very different. Across much of the country, landlords are quietly accepting lower rents than they were a year ago.Not because demand has disappeared, but because the rental market has changed.
New-Let Rents Are Falling in Real Terms
COHO analysed new-let data across 90 local authority areas during 2026. Once inflation is taken into account, 92% of those areas have seen rents move backwards. On average, new tenants are paying around 3% less in real terms than the tenants who came before them. In the weakest-performing markets, the picture is even more striking. The bottom 10% of new lets experienced real-terms rent reductions of between 10% and 20%. Even some of the strongest-performing areas struggled to keep pace with inflation, meaning that landlords were often earning less in real terms despite headline rents appearing stable. In other words, much of the country is experiencing a quiet reduction in new-let rents.
Why Doesn’t This Match the Headlines?
Official statistics currently show rents increasing by around 3.5%, so why does that appear to contradict what landlords are seeing? The answer lies in how those figures are calculated. Much of the reported growth is being driven by tenants who remain in their existing homes. As landlords increasingly review rents during a tenancy, sitting tenants are seeing larger annual increases than they would have done historically. Once inflation is taken into account, however, that headline growth represents only a modest increase in real terms. Meanwhile, new-let rents have remained largely flat or declined across much of the country. The rental market has not moved uniformly. It has split into two distinct markets, with existing tenants and new tenants experiencing very different outcomes.
The Hidden Flexibility in Asking Rents
Property portals such as Rightmove, Zoopla and SpareRoom primarily report advertised rents rather than the rents ultimately agreed between landlords and tenants. Under the Renters’ Rights Act, landlords cannot agree a rent that is higher than the advertised price. They can, however, agree a lower one. As competition for tenants has increased in some areas, that is exactly what many landlords are doing. The agreed rent often falls below the advertised figure, meaning headline asking rents do not always reflect what tenants are actually paying. This helps explain why transactional data on completed tenancies paints a weaker picture than many public rent indices.
Why Landlords Are Accepting Lower Rents
This shift is not entirely negative for landlords. One reason new-let rents have softened is that landlords are now increasing rents more regularly during existing tenancies. Historically, many landlords left reliable tenants on below-market rents before making a larger adjustment when the property was re-let. The Renters’ Rights Act has changed that behaviour. By keeping rents closer to market levels throughout the tenancy, there is far less need for a significant increase when a tenant eventually moves out. The large “reset” between tenancies has largely disappeared.
The Bigger Change for Landlords
Perhaps the most important consequence is not the change in rents themselves, but the change in landlord behaviour. For years, many landlords accepted tenant turnover because each new tenancy offered the opportunity to increase the rent significantly. That calculation is becoming much less attractive. Every change of tenant comes with costs. Letting fees, marketing, viewings and void periods all reduce profitability. If landlords can no longer rely on a substantial rent increase at the end of a tenancy, those costs become much harder to justify. Increasingly, the most profitable strategy is not replacing tenants more frequently. It is finding the right tenant in the first place and keeping them for as long as possible. As the rental market continues to evolve, successful landlords are recognising that long-term occupancy is becoming just as valuable as rental growth itself.
Prefer to watch this as a video?
The headlines suggest rents are still rising.
The data tells a more complicated story.
While official figures continue to report annual rental growth, the reality for new tenancies is very different. Across much of the country, landlords are quietly accepting lower rents than they were a year ago.Not because demand has disappeared, but because the rental market has changed.
New-Let Rents Are Falling in Real Terms
COHO analysed new-let data across 90 local authority areas during 2026. Once inflation is taken into account, 92% of those areas have seen rents move backwards. On average, new tenants are paying around 3% less in real terms than the tenants who came before them. In the weakest-performing markets, the picture is even more striking. The bottom 10% of new lets experienced real-terms rent reductions of between 10% and 20%. Even some of the strongest-performing areas struggled to keep pace with inflation, meaning that landlords were often earning less in real terms despite headline rents appearing stable. In other words, much of the country is experiencing a quiet reduction in new-let rents.
Why Doesn’t This Match the Headlines?
Official statistics currently show rents increasing by around 3.5%, so why does that appear to contradict what landlords are seeing? The answer lies in how those figures are calculated. Much of the reported growth is being driven by tenants who remain in their existing homes. As landlords increasingly review rents during a tenancy, sitting tenants are seeing larger annual increases than they would have done historically. Once inflation is taken into account, however, that headline growth represents only a modest increase in real terms. Meanwhile, new-let rents have remained largely flat or declined across much of the country. The rental market has not moved uniformly. It has split into two distinct markets, with existing tenants and new tenants experiencing very different outcomes.
The Hidden Flexibility in Asking Rents
Property portals such as Rightmove, Zoopla and SpareRoom primarily report advertised rents rather than the rents ultimately agreed between landlords and tenants. Under the Renters’ Rights Act, landlords cannot agree a rent that is higher than the advertised price. They can, however, agree a lower one. As competition for tenants has increased in some areas, that is exactly what many landlords are doing. The agreed rent often falls below the advertised figure, meaning headline asking rents do not always reflect what tenants are actually paying. This helps explain why transactional data on completed tenancies paints a weaker picture than many public rent indices.
Why Landlords Are Accepting Lower Rents
This shift is not entirely negative for landlords. One reason new-let rents have softened is that landlords are now increasing rents more regularly during existing tenancies. Historically, many landlords left reliable tenants on below-market rents before making a larger adjustment when the property was re-let. The Renters’ Rights Act has changed that behaviour. By keeping rents closer to market levels throughout the tenancy, there is far less need for a significant increase when a tenant eventually moves out. The large “reset” between tenancies has largely disappeared.
The Bigger Change for Landlords
Perhaps the most important consequence is not the change in rents themselves, but the change in landlord behaviour. For years, many landlords accepted tenant turnover because each new tenancy offered the opportunity to increase the rent significantly. That calculation is becoming much less attractive. Every change of tenant comes with costs. Letting fees, marketing, viewings and void periods all reduce profitability. If landlords can no longer rely on a substantial rent increase at the end of a tenancy, those costs become much harder to justify. Increasingly, the most profitable strategy is not replacing tenants more frequently. It is finding the right tenant in the first place and keeping them for as long as possible. As the rental market continues to evolve, successful landlords are recognising that long-term occupancy is becoming just as valuable as rental growth itself.
