Renewal rents also rose, with the average increasing 3.2% year-on-year to £1,312 per month in April. The strongest growth in renewals was recorded in the Midlands (4.5%) and the North (4.8%), where below-market contract rents have left many existing tenants exposed to steeper adjustments.
“With the Renters’ Rights Act becoming law against a backdrop of rising mortgage rates, some landlords have taken the opportunity to leave the market,” said Aneisha Beveridge (pictured right), head of research at Hamptons. “Increasingly, though, they’re passing on their properties to other investors.
“This means the recent spike in landlord purchases reflects homes changing hands between investors, rather than the dawn of a new buy-to-let boom. It’s predominantly in areas where the economics of buy-to-let stack up best that homes sold by landlords are most likely to stay within the rental market. Higher yields across much of the North of England are more likely to offset rising mortgage and tax costs. Across much of the South, meanwhile, homes sold by landlords are more likely to be bought by a first-time buyer or owner-occupiers trading up.
“Rental growth strengthened in the final month before the Renters’ Rights Act became law. As some landlords opted to sell ahead of the changes, more tenants were forced back into the market, increasing demand for homes to rent. While the full impact of the new rules is yet to play out, early evidence suggests they are already adding to upward pressure on rents.”
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