Recent research by mortgage specialist Pegasus Insight suggests that the Renters Rights Act could cause a rise in rental prices across the United Kingdom. The findings indicate that landlords are preparing to adjust their letting strategies to cope with stricter regulations and greater compliance demands introduced by the new legislation. As the property market continues to adapt to these changes, the research points to a noticeable shift in how landlords plan to operate in the coming months.
According to Pegasus Insight’s Landlord Trends Q3 2025 report, a significant 81% of landlords said they are likely to become more selective when choosing tenants. Many of them feel that the new rules could expose them to additional financial risks or operational challenges. This cautious approach could make it harder for some tenants to secure rental homes, especially those with limited income or imperfect credit histories.
In addition to being more selective, 71% of landlords surveyed revealed that they plan to raise their rents in response to the rising costs associated with the Act. These costs stem from stricter compliance measures, additional paperwork, and limitations on how and when rent reviews can occur. For many landlords, these new financial burdens mean that increasing rent is one of the few available options to maintain profitability and cover new expenses.
The report also revealed that 73% of landlords believe the Renters Rights Act will negatively affect their own letting activity. Many expressed concerns that it will increase bureaucracy and reduce the flexibility they previously had when managing their properties. This level of uncertainty is fuelling anxiety among property owners who feel they are losing control over how they run their rental businesses.
Furthermore, 81% of landlords think the Act will harm the wider Private Rented Sector (PRS) by discouraging new investment and pushing some landlords to sell up. Reduced supply in the rental market could, in turn, push prices even higher, making it harder for renters to find affordable housing. The ripple effect of such changes could impact local housing availability and affordability across the UK.
Mark Long, founder and managing director of Pegasus Insight, explained that the new law represents one of the most significant transformations in the private rented sector for decades. He noted that landlords are responding cautiously, taking preventive steps to protect their income and reduce exposure to risk. According to Long, these actions are understandable business responses, though they could have unintended consequences for tenants already facing affordability pressures.
Long pointed out that stricter rules around rent reviews and growing uncertainty about evictions are among the key drivers of landlord anxiety. Many are acting early to avoid potential financial losses by raising rents now, before the full effects of the Act take hold. This approach, while strategic, may worsen affordability challenges for tenants struggling to keep up with rent increases.
The Pegasus Insight report also highlighted a widening divide between landlords’ and tenants’ perspectives on the Renters Rights Act. While landlords view it as a complex and costly change, many tenants see it as a step in the right direction toward fairer and more secure renting. This clash in perception shows how differently each group experiences the rental market and what they value most.
Long noted that almost half of renters believe the Act will benefit them, largely because of stronger protections against unfair rent hikes and eviction safeguards. For many tenants, the new measures represent hope for more stability and predictability in their housing situations. However, Pegasus Insight’s findings show that landlords see things quite differently.
According to the report, four out of five landlords intend to be more selective about who they rent to, and two-thirds are planning rent increases to offset the additional costs of compliance. These combined actions could reduce access to rental homes for some tenants, particularly those with lower incomes or less stable employment.
This growing disconnect between landlord concerns and tenant optimism underscores how complicated housing reform can be. While government policies aim to strengthen tenant rights, they can sometimes create financial strain for property owners. When that happens, landlords often respond by passing those costs on to tenants, which undermines the policy’s intended benefits.
Long warned that these findings highlight the delicate balance the government must maintain when regulating the private rented sector. Too much intervention can discourage landlords from staying in the market, leading to fewer available homes. On the other hand, too little oversight could leave tenants without adequate protection from unfair treatment or rising rents.
The report also raises concerns about smaller landlords who may not have the financial flexibility to absorb new costs. Many of them operate with thin profit margins, and additional regulatory pressure could push them to sell their properties or leave the market entirely. This could further reduce rental supply, putting even more pressure on prices.
Tenants, meanwhile, may face fewer choices and rising competition for available properties. As more landlords tighten their tenant selection criteria, vulnerable renters—such as those with limited savings or credit challenges—could struggle to secure housing. This situation risks deepening the housing inequality already present in many parts of the UK.
In conclusion, Pegasus Insight’s research suggests that while the Renters Rights Act was designed to create fairer conditions for renters, it may have the unintended effect of driving rents higher and reducing access to affordable housing. The findings reveal a widening gap between tenant hopes and landlord realities, highlighting the need for balanced reforms that protect both sides. Without careful implementation, well-intentioned policies could end up worsening the very problems they were meant to solve.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property