With nearly a quarter of rental listings reduced in 2025 and tenant demand shifting, pricing a property correctly at launch has never been more important.
The UK rental market is entering a new phase. After years of volatility, 2026 brings a more stable, but no less demanding, environment for landlords. With the Renters’ Rights Act 2025 now restricting offers above the asking rent, and market conditions becoming more balanced, strategic pricing is critical.
At Northwood, we’ve adapted our approach to help landlords avoid income loss, reduce arrears risk, and secure strong, long-term tenants. It starts with getting the price right.
Related: The base rate cut and what it means for property plans in 2026
2026: A rebalancing market, not a retreat
After a frenetic few years, rental activity is normalising, but it’s not going backwards. Instead, we’re seeing a more nuanced market emerge:
- Rental supply increased by 11% in 2025, giving tenants more choice
- Demand fell by 12%, signalling the end of pandemic-fuelled competition
- 24% of listings were reduced after launch in 2025, often due to overpricing
- Enquiries per property remain above pre-pandemic levels, suggesting a new normal
Latest data shows a more balanced rental market: outside London, average advertised rents hit £1,385 pcm in Q3 2025 (up 3.1%), while London reached £2,736 pcm (up 1.6%). UK-wide, rents averaged £1,366 in November 2025, up 4.4% annually – the slowest growth since mid-2022. Regional variation remains, with increases of 6.4% in Northern Ireland, 6.1% in Wales, 4.4% in England, and 3.3% in Scotland.
The hidden cost of price reductions
Under the Renters’ Rights Act 2025, landlords are no longer permitted to accept offers above the advertised rent. This means the price you list is the maximum a tenant can offer, removing the potential for competitive bidding. In this new environment, inflated pricing at launch is not just ineffective; it can be financially damaging.
Overpriced properties tend to remain on the market longer, increasing void periods and reducing overall returns. They attract fewer serious enquiries, lose visibility on property portals, and risk appearing stale to prospective tenants, making future reductions less effective. At Northwood, we use local insight and live market data to ensure properties are priced accurately from day one, helping landlords let faster, avoid costly delays and protect their income from the outset.
Related: Possession grounds and the Renters’ Rights Act from May 2026
Tenant quality matters more than speed
Letting quickly doesn’t guarantee long-term success. The wrong tenant can cost far more than a short void and lead to months of stress. In 2025, 45% of landlords experienced rent arrears, with many cases lasting over six months. Prevention is far more effective than resolution, which is why our approach prioritises tenant quality from the outset.
We carry out rigorous affordability checks, verify income-to-rent ratios, obtain references from previous landlords and employers, and conduct full credit profiling. This thorough screening process reduces the risk of arrears, supports longer tenancies and helps protect your investment over the long term.
Related: How to conduct a right-to-rent check?
Northwood’s Guaranteed Rent: Income security in a changing market
For landlords who want even greater certainty, Northwood’s Guaranteed Rent service provides a fixed monthly income, no matter what.
Whether your property is let, vacant, or the tenant falls into arrears, your payments continue without interruption. When paired with our precision pricing, it offers:
- Predictable, stable returns
- Protection from arrears and legal costs
- Zero voids or rent loss
- Full property management with no hassle
In a market rebalancing after years of flux, this kind of certainty is invaluable.
Related: A major compliance shift for self-managing landlords under the Renters’ Rights Act
Ready to take the next step?
Accurate pricing, the right tenant, and reliable income aren’t left to chance — they’re the result of a clear, informed strategy. At Northwood, we combine national market insight with local expertise to help landlords make confident decisions and achieve consistent returns. Whether you’re letting for the first time or managing a growing portfolio, the right advice from the outset is what sets a successful tenancy apart. Get in touch with your local Northwood office to discuss how we can support your lettings strategy in 2026.
Sources: Rightmove Rental Price Tracker Q3 2025, Office for National Statistics Private Rental Index Nov 2025.
