For the second successive quarter, 65% of landlords report increasing rents during the previous 12 months, while 32% say rents have remained unchanged and 2% saw rents decreasing, the highest level recorded since Q2 2022. (slide 27) This is according to the Q1 2026 Pegasus Insight Landlord Trends report, produced in conjunction with Foundation.
Looking ahead, 61% of landlords intend to raise rents over the next year, with the average projected increase standing at 5.7%, down slightly from Q4 2025. Larger portfolio landlords continue to take a more active approach, with 75% of those holding 11 or more properties planning increases, compared with 59% of smaller landlords. This follows a similar trend over the past year, where 81% of larger landlords had already increased rents, versus 62% of smaller landlords.
Portfolio costs remain the main factor driving rental growth. Landlords point to rising running costs and the need to keep rents aligned with local market levels as the two biggest influences behind future increases. Inflationary pressures also remain important, with just under half of landlords planning increases in response to wider cost pressures.
Taxation is still having an impact, although to a lesser extent than previously. Higher tax rates announced in November’s Budget now rank as the third most common reason for raising rents, having been the second most cited factor in the previous quarter.
Regulation is also beginning to influence landlord pricing strategies more directly. Three quarters of landlords increasing rents say the new procedures linked to the Renters’ Rights Act are contributing to their decision. Around half specifically reference the abolition of Section 21 ‘no fault’ evictions and changes to Section 8 possession grounds as influencing rental pricing decisions. In contrast, the proposed ban on rental bidding appears to be having only limited impact, contributing to just 13% of planned increases.
Despite ongoing increases, the latest figures suggest the rental market may be entering a more stable phase after a prolonged period of rapid growth. While upward pressure on rents remains, it is a market increasingly shaped by operating costs, regulation and local supply dynamics, rather than the sharp rental movements seen in recent years.
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