Zoopla has doubled its forecast for UK rental growth this year, now expecting rents on new lets to be 4% to 5% higher by the end of 2026. The property portal points to what it calls a "perfect storm" of falling landlord supply, weak new investment in rental property and higher mortgage costs, all pushing rents upward at a faster pace than previously expected, as reported by BuyAssociation.
For anyone renting, buying or letting a property in the UK right now, this is not just an abstract statistic. It reflects a rental market that is getting tighter, not looser, and the reasons behind it matter as much as the number itself.
Why rents are being pushed higher
The forces Zoopla identifies are all connected. Fewer landlords are bringing new properties to the rental market, which reduces the choice available to tenants. At the same time, existing landlords face higher mortgage costs than they did a few years ago, which puts pressure on the returns they need from rent to make letting viable. Add in low levels of new investment from landlords buying additional property, and you get a smaller pool of rental homes chasing steady or growing tenant demand. When supply falls and demand holds up, prices rise. That is the basic mechanic behind Zoopla doubling its forecast rather than simply nudging it up.
What this means if you are a landlord
For existing landlords, a stronger rental growth forecast is, on the face of it, good news. Higher achievable rents can help offset the higher borrowing costs that have squeezed margins across the buy-to-let sector in recent years. But it is worth being realistic about what is driving this: it is a shrinking market, not a booming one. Fewer landlords investing in new stock means less competition among landlords themselves, but it also means the sector as a whole may be contracting, which raises longer-term questions about supply for tenants and sustainability for the market.
Landlords weighing up whether to hold, expand or refinance existing property in this environment may find it useful to look at how their current mortgage arrangements stack up against today's rates and rental income projections. Those considering restructuring existing borrowing to make the most of stronger rental income potential can find more detail on buy-to-let refinancing options designed for exactly this kind of repositioning.
What this means if you are a tenant or renter
For tenants, the picture is less encouraging. A tighter rental market with less new supply typically means more competition for available properties and less room to negotiate on price. If rents do rise 4% to 5% by the end of 2026 as Zoopla now forecasts, that adds real pressure to household budgets, particularly for those already stretched by the cost of living. It may also push some renters to reconsider whether buying, even with today's higher mortgage rates, works out more affordable over time than continuing to rent into a market that is expected to keep tightening.
What this means if you are thinking of buying
For prospective buyers, and especially first-time buyers weighing rent against a mortgage, a rising rental forecast can shift the calculation. If rents are expected to climb faster than previously thought, the gap between renting and owning may narrow in some areas, even accounting for higher mortgage rates and deposit requirements. It is not a reason to rush a decision, but it is a factor worth weighing alongside affordability, job security and how long you plan to stay in an area.
