UK rental market faces regulatory shifts and rising rents

The UK private rented sector is facing significant regulatory and economic shifts. Research from Zero Deposit suggests that over one million landlords could adopt deposit alternatives if the government proceeds with plans to abolish insured tenancy deposit schemes. While 64% of landlords would favor traditional custodial schemes, a significant portion remains open to flexible alternatives to manage risk and tenant needs.

Market data from RICS indicates renewed upward pressure on rents due to growing tenant demand and declining landlord instructions. RICS members forecast an average rent increase of approximately 3% over the next 12 months. Meanwhile, SpareRoom reports widening affordability gaps in flatshares, with Edinburgh experiencing the largest shortfall between tenant budgets and actual asking rents.

On the regulatory front, Housing Minister Matthew Pennycook stated that the government is still determining whether the new Private Rented Sector (PRS) Ombudsman will be required to share evidence of landlord non-compliance with local authorities. This comes as the government rolls out a mandatory rental property registration service for landlords in England.