After years of almost relentless rental inflation across Great Britain, the private rented sector is showing clear signs of easing. Recent industry data from the HomeLet Rental Index reveals that average UK rents fell modestly to £1,317 in December 2025, down 1.5 per cent from November’s £1,337. Outside London, the picture is similar with average rents at £1,124, a 0.8 per cent month-on-month decrease, even while annual figures remain higher than last year’s, up 2.2 per cent outside London and 2.6 per cent nationally.

That slight slackening in rents is significant. It suggests that the extreme supply-demand imbalance of the past few years is losing intensity even though affordability pressures persist for many tenants. This trend matters because it shifts the calculus for landlords and agents from purely maximising rent levels to instead focusing on tenant quality and long-term stability.

At the same time, the UK’s housing landscape is entering a period of major regulatory change that will materially affect how lettings professionals operate.

Renters’ Rights Act: Rolling Tenancies and Greater Tenant Security

In October 2025, the Renters’ Rights Act received Royal Assent, marking the most significant overhaul of the private rented sector in nearly three decades. The legislation will bring sweeping reforms when key provisions come into force from 1 May 2026. Among its core elements, the Act will:

• Abolish the long-standing Section 21 no-fault eviction process

• Convert all fixed-term assured shorthold tenancies into Assured Periodic Tenancies, meaning tenants can give two months’ notice at any point

• Strengthen the grounds for possession that landlords may rely upon under Section 8

• Restrict rent increases to once per year and introduce more structured processes for tenants to challenge unreasonable rises

• Ban practices such as rental bidding wars and discriminatory blanket policies on children or benefit recipients

• Require landlords to consider reasonable tenant requests such as pet ownership and ensure properties meet a new decent homes standard in due course

• Cap advance rent to one month upfront after a tenancy is agreed

These changes are poised to reshape how lettings teams manage portfolios. Where previously landlords could issue a Section 21 notice to regain possession without citing fault, all tenancies will now default to rolling monthly contracts. That means more flexibility for tenants and, at the same time, less certainty for landlords about how long they will occupy a property.

For experienced letting agents and property managers, this shift underscores the importance of placing the right tenant from the outset, not just to protect income but to reduce turnover, disputes, arrears and enforcement complexities.

Why Getting the Right Tenant Matters More Than Ever

With rents softening, landlords may naturally focus on how to maximise yield. But the regulatory environment now adds another dimension. Tenant behaviour and compliance can have a disproportionate impact on a portfolio’s performance when tenancies are effectively monthly rolling contracts.

Consider the implications of this new tenancy framework:

• A tenant can now give just two months’ notice at any time

• Landlords must rely more heavily on Section 8 grounds when seeking possession, which can be a complex and evidence-intensive process

• Rent increases are confined to one per year and subject to challenge

• Enhanced tenant protections reduce the relative risk of instability for renters and raise the bar for landlords to demonstrate justified action

That context makes accurate tenant referencing central to minimising risk. Knowing a prospective tenant’s employment history, affordability, previous rental behaviour and other key indicators helps lettings teams anticipate and mitigate problems before they occur.

Industry data already points to why quality referencing should be a priority. Submissions to Parliament and sector-wide risk reporting have highlighted increases in tenancy fraud and unreliable tenancy records where referencing processes are weak. In a market where landlords cannot depend on fixed terms and rental security tools like Section 21 are no longer available, placing a tenant who meets affordability and reliability criteria becomes essential.

From Independent Landlords to Enterprise PBSA Operators Property Managers Need Robust Risk Controls

Whether you manage a handful of homes, or thousands of beds across purpose-built student accommodation and enterprise portfolios, the drivers are aligned. With rents stabilising and legal changes increasing tenant agency, success hinges on the ability to:

• Screen prospects quickly and consistently

• Ensure affordability and the ability to meet payment obligations

• Flag high-risk profiles early

• Build compliant tenancies that support retention

This is not simply an administrative exercise. It is a strategic part of asset and portfolio management, particularly as legislation places greater emphasis on tenant rights and long-term occupation.

Rents May Be Easing But the Stakes for Landlords Have Never Been Higher

A slight downward drift in rental figures is unfolding alongside structural reform. Even though rents remain higher year-on-year in most regions, the shift towards periodic tenancies means the decision of who you let to now carries more weight. There is less margin for error and fewer automatic mechanisms to resolve underperforming tenancies.

For landlords and letting agents focused on protecting income and maintaining operational resilience, the direction of travel is clear. Prioritising tenant quality and embedding robust referencing processes early reduces risk, cost and disruption later.

How togetha Supports Better Tenant Referencing and Stronger Lettings Outcomes

At togetha, we understand these market dynamics and regulatory changes. Our platform includes a comprehensive tenant referencing process as standard, without the additional per-check fees many property management systems apply. By embedding referencing directly into your workflow, togetha helps reduce administrative overhead and supports better decision-making at the point of let.

If you want to see how much time and money you could save by streamlining your tenant referencing, book a demo with togetha and see the platform in action.