Seven in 10 landlords (71%) plan to raise rents to offset costs linked to the Renters’ Rights Act, Pegasus Insight has revealed.

The Act, which received Royal Assent last month, abolishes Section 21 no-fault evictions, introduces open-ended tenancies, limits rent increases to once per year and caps advance rent payments at one month.

However, the mortgage market specialist found that the legislation will drive rents higher as landlords respond to these new measures and compliance demands.

According to Pegasus’ Landlord Trends Q3 2025 report, 81% of landlords expect the legislation to make them more selective about prospective tenants, while 71% plan to increase rents to absorb new costs and restrictions.

Furthermore, 73% of landlords believe the Act will have a negative impact on their own lettings, and 81% think it will negatively impact the wider private rented sector (PRS).

Founder and managing director at Pegasus Insight, Mark Long, described the Act as "one of the most significant shifts in the PRS sector in decades".

He concluded: "Faced with stricter limits on rent reviews and growing uncertainty around evictions, they’re acting pre-emptively to protect income and manage risk. These are rational business responses, but they risk compounding the affordability pressures tenants are already facing.

"Our recent Tenant Trends research found that almost half of renters believe the Renters’ Rights Act will benefit them, largely due to stronger protections and limits on rent rises. But the corresponding Landlord Trends data tells another story: four in five landlords say they’ll be more choosy about who they let to, and two-thirds intend to raise rents in response to the new rules.

"This mismatch between perception and reality underlines how complex PRS reform can be: policies designed to protect tenants could, unintentionally, make it harder for them to find and afford a home."

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