2026 Predictions for the Lettings Sector
By Allison Thompson, National Lettings Managing Director, Leaders
“The Renters’ Rights Bill will be the defining influence on the sector in 2026. While it raises the bar for professionalism and improves standards for tenants, it also represents the biggest operational shift landlords and agents have faced in a generation. Long-standing tenancy practices are changing, and the scale of training and systems work required should not be underestimated. The penalty regime is now clear and carries real weight: serious breaches, such as unlawful eviction or harassment, can attract civil penalties of up to £35,000, and procedural failures involving tenancy notices and prescribed processes can also lead to substantial fines. At LRG, this has driven a clear shift in how we operate. We are moving further towards being an advisory-led agent, acting as a trusted voice for landlords at a time when compliance, execution and risk management matter more than ever.
“As the administrative burden increases, our expectation is that the need for professional managing agents will only strengthen. In our Northern regions, an open day saw us speak to over 800 landlords and secure more than 50 new instructions, with the majority opting for fully managed services. A recurring theme from those conversations is that many landlords are not hearing anything about the Renters’ Rights Act from their existing agents, despite implementation being close.
“From an operational perspective, the next phase will be critical. The government is expected to publish an information sheet in March, when landlords and agents will have 30 days to issue this to every tenant. Existing tenancy agreements will need to be amended and reissued, and systems updated to reflect new notices and processes.
“Rents are still expected to rise, but at a much more moderate pace, around 3% nationally and lower in London, and landlords will need to adjust expectations after several years of exceptional growth. Affordability pressures remain very real for tenants, and referencing continues to be challenging in many cases. While rents are still rising, the impact of the new rent increase framework is unlikely to be felt until later in the year.
“We also expect to see continued changes in landlord behaviour. Some smaller landlords will reassess their position, while larger portfolio and professional landlords increasingly view the current environment as an opportunity. Over time, this will reshape the PRS profile, with greater consolidation into professional investment. We also continue to see strong investor interest in regional cities such as Manchester, Leeds and Sheffield, where the fundamentals remain compelling.
“There are still unanswered questions, particularly regarding EPC requirements, which have been repeatedly delayed. Clarity here is essential, as it will play a major role in determining whether investment in the sector continues. Overall, 2026 will be about execution. Those who prepare early, invest in the right advice and take a proactive approach will be best placed to navigate what comes next.”
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