Stagnant Rents Outside London: Impact on Landlords and Borrowers

Stagnant Rents Outside London: A Detailed Overview

As of April 2026, average rents outside London have flatlined for the first time since 2017, with prices failing to rise between Q4 2025 and Q1 2026. Data from Rightmove reveals that advertised rents remained unchanged at £1,370 per calendar month in Q1. However, they are still 1.6% higher than a year earlier, marking the slowest annual growth since 2018. In contrast, rents in London continued to edge upwards, rising by 0.7% over the quarter to £2,736 per month, although remaining below the peak seen in Q3 2025.

The number of homes available to rent is now 3% higher than a year ago, reaching its highest level for this time of year since 2021. Despite the upcoming Renters’ Rights Act coming into force on 1 May, there has been no surge in new listings. New rental properties in March were down 6% compared with a year earlier. The average rental property now receives eight enquiries, down from 11 a year ago and significantly lower than the peak of 29 recorded in 2022.

Impact on Landlords: A Worked Example

Consider a landlord with a £200,000 interest-only buy-to-let (BTL) mortgage. With the average two-year rate for a landlord purchasing with a 25% deposit now at 5.79%, up from 4.86% prior to the Iran conflict, their monthly cost would rise from £805 to £963. This increase in borrowing costs, coupled with stagnant rents, could squeeze their profit margins.

For instance, if they were charging the average rent of £1,370 per month, their annual rental income would be £16,440. With the new mortgage rate, their annual mortgage cost would be £11,556, leaving them with a profit of £4,884 before tax and maintenance costs. This is a significant reduction from the £6,780 profit they would have made with the previous mortgage rate.

Market Context and Implications

Recent lending data suggests some support for supply, with UK Finance reporting that the total number of buy-to-let loans was 14% higher at the start of 2026 compared with the start of 2025, including an 18% rise in remortgages year-on-year. However, this data only covers January and predates recent increases in borrowing costs.

Rightmove suggests that rising buy-to-let mortgage rates since the outbreak of the war in Iran are adding further pressure on landlords. This, coupled with the stagnant rents outside London, could potentially lead to a more challenging environment for landlords. Furthermore, with 26% of rental listings seeing a reduction while advertised – the highest proportion recorded by Rightmove since it began tracking the measure in 2012 – landlords may need to be more competitive with their pricing.

For borrowers, the current base rate of 3.75% may also impact mortgage affordability. With the base rate expected to rise, borrowing costs could increase further, which may affect both landlords and homeowners. This could potentially lead to a slowdown in the property market, particularly in the buy-to-let sector.