This article explores how limited housing supply, rising landlord costs and local council housing availability are shaping the future of the rental market.
21/01/2026By Pauzible Team · Editorial Team
Renting a home has become more expensive over recent years, and many households are already feeling stretched. Monthly rental payments now take up a larger share of income than they once did. This leaves less room for savings or unexpected costs. For some renters, even a slight increase can create real financial pressure.
Pauzible
Recent RICS forecasts suggest rental prices may rise faster in the future. While there are signs that demand has cooled slightly in some areas, the number of homes available to rent remains low. This imbalance is shaping the rental market and affecting private tenants and housing availability across the country.
How RICS views the current rental market
RICS collects regular feedback from chartered surveyors and letting agents who work in local property markets. This approach helps identify trends early, before they are fully reflected in official data.
Recent RICS surveys show that tenant demand is no longer rising at the levels seen after the pandemic. However, the supply of rental homes has continued to fall. One of the key indicators RICS tracks is landlord instructions, which measure how many landlords are asking agents to market properties for rent. These figures are indicating that more landlords are withdrawing properties than bringing new ones to market.
RICS is clear that this lack of supply is the main reason rents are expected to rise further. Even if demand stays steady, competition for a smaller number of homes tends to push prices upward. Survey respondents expect rents to keep increasing over the coming year, particularly in areas where people need to stay close to work, schools or family support networks.
Why rental prices may increase faster in the future
Several long-term pressures are driving higher rents. These issues are structural rather than temporary, which is why RICS believes the pace of rent increases could accelerate again.
Fewer homes are being offered for rent Many landlords are choosing not to re-let properties when tenants vacate. Some are selling, while others are waiting for more certainty around future costs and regulations. When fewer homes are available, tenants face more competition, which drives rental costs upwards.
Rising costs for landlords are pushing rents upwards Landlords are facing higher costs across many areas, including mortgage payments, insurance, maintenance, safety compliance and managing agent fees. Even when interest rates ease, many landlords remain on higher fixed-rate deals. These ongoing costs often lead to higher rents at renewal or re-letting.
Mortgage rate refixes affect rental pricing Changes in mortgage rates directly affect landlords with buy-to-let loans. Those coming off fixed deals may see sharp increases in monthly payments. To manage this pressure, some landlords raise rents where market conditions allow.
More people renting for longer Buying a home has become harder for many households. Higher deposits, affordability checks and house prices mean more people stay in rented homes for longer. This keeps demand high.
Limited housebuilding and rental supply New homes are not being built quickly enough to meet housing needs. Many developments focus on homes for sale rather than long-term rental properties. This limits the growth of rental supply.
Uncertainty around rental regulation Proposed reforms to the private rented sector have created uncertainty for landlords. Some respond by reducing exposure or increasing rents to offset perceived risks. Uncertainty can reduce supply.
Housing support falling behind market rents In many areas, Local Housing Allowance rates do not reflect current market rents. This pushes more households into lower-priced private rentals, increasing competition.
Strong local demand in specific regions Areas with good transport links, universities or employment opportunities often see faster rental growth.
Rent payments and household pressure
As rents rise, managing rent payments becomes more challenging. Many tenants already spend a high share of their income on housing, leaving little flexibility when rents rise.
Private rent is usually paid monthly in advance. When rents rise at renewal, tenants often need to adjust budgets immediately. This can lead to increased credit use, reduced savings or difficult choices about other essentials.
For tenants on Universal Credit, rent support is part of the monthly payment. This can lead to budgeting difficulties, especially when rent increases but benefit payments stay the same. In some cases, Alternative Payment Arrangements enable the housing element to be paid directly to the landlord, helping to prevent arrears.
Council rent payment and affordability pressures
Council housing rents are typically lower than private rents, but they are not immune to pressures. Councils face rising costs for repairs, building safety and energy efficiency upgrades. Rent income is essential for maintaining and improving housing stock.
When tenants struggle to pay council rent, early contact with the housing team is essential. Councils can often agree on repayment plans and offer advice. Where Universal Credit is involved, arrangements can sometimes be made to support regular payments and reduce the risk of arrears.
Example: Tyne and Wear housing availability and local demand
Tyne and Wear's housing market is diverse, featuring private rentals, council homes and housing association properties. Strong demand persists throughout much of the region, driven by employment prospects, transportation connections, and educational institutions.
Social housing across Tyne and Wear is often accessed through choice-based letting schemes. These systems allow applicants to register, search for available homes, and place bids based on their priority and circumstances. Areas including Newcastle, Gateshead, North Tyneside and South Tyneside share linked systems, making it easier to search across council boundaries.
However, demand far outweighs supply. Waiting lists can be long, and many households rely on private renting while waiting for a suitable social home. When private rents rise quickly, pressure increases across the entire system.
How mortgage trends link back to rent levels
Mortgage news often focuses on buyers, but it also significantly affects the rental market. When interest rates rise, landlords face higher costs. When rates fall, relief is gradual and uneven.
Some renters may move into homeownership if borrowing becomes more affordable. However, if housing supply remains limited, this does not significantly ease rental pressure. Lower rates can also push house prices higher, making it more expensive to buy rental properties and reinforcing higher rent levels.
RICS continues to highlight that supply, rather than demand, is the key factor in shaping future rent trends.
Conclusion
RICS forecasts indicate that pressure in the rental market has not eased in any meaningful way. While demand has stabilised in some regions, the lack of rental supply continues to drive rent increases. Higher landlord costs, mortgage changes, limited housing supply and gaps in housing support all contribute to this trend.
For renters, this means continued pressure on monthly rent payments and household budgets. For councils and housing providers, it means rising demand and ongoing challenges in meeting housing needs. In areas such as Tyne and Wear, local housing systems help manage access to social housing, but they cannot fully offset private-market pressures. Unless rental supply increases significantly, faster rent rises remain a real risk in the years ahead.
FAQs
Q. Why are rents continuing to rise even when demand is not surging?
A. Rents are rising because there are not enough homes available to rent. Low supply means tenants continue to compete for properties, keeping rent high.
Q. What do landlord instructions mean in RICS reports?
A. They show how many landlords are putting homes up for rent through agents. When the figure is low, fewer properties are available.
Q. How does mortgage news affect renters?
A. Many landlords have mortgages. Higher interest rates increase their costs, which can lead to rent rises.
Q. Will rents keep rising in the near future?
A. RICS expects rents to continue to increase in many areas. This is mainly due to low housing supply and ongoing cost pressures on landlords.
About the author
Pauzible Team
Editorial Team
The Pauzible Team consists of finance professionals and property market specialists dedicated to reinventing home ownership and BTL financing. With deep expertise across UK real estate and innovative financial products like Equity Partnership Agreements, we provide landlords and homeowners with the insights they need to unlock equity, navigate market volatility, and build sustainable wealth through property. Our mission is to make complex property finance simpler, quicker, and more accessible for everyone.
pay rent onlinepay rentrent paymentshome letmortgage news uk
Ready to see what Pauzible could unlock?
Explore how accessing equity from your BTL property could support your business investment plans.
No obligation. Just a clear view of what might be possible.
Pauzible Asset Services (UK) Limited is registered in England and Wales with Company number 15917067. Our registered office is at 38 Lombard Street London EC3V 9BS. Pauzible is a trading name of Pauzible Asset Services (UK) Limited. Pauzible Asset Services (UK) Limited is registered with the Information Commissioner's Office with Registration reference ZC088971.
Pauzible Asset Services (UK) Limited's business falls outside the scope of financial services regulation & Pauzible Asset Services (UK) Limited is, therefore, not authorised and regulated by the Financial Conduct Authority. This means that you do not have any of the protections under the Financial Conduct Authority rules and do not have any cover from the Financial Ombudsman Scheme or the Financial Services Compensation Scheme in relation to any contract that you may have with Pauzible Asset Services (UK) Limited. Customers should ensure they understand what this means before they use the Pauzible product.
Telephone calls may be recorded for quality assurance, training, and monitoring purposes.
