The rental market across England has entered its most significant period of change in a generation. The Renters’ Rights Act came into force on 1 May 2026, and landlords and tenants alike have had to adapt — quickly — to a fundamentally different legal landscape.
Here in the South Cotswolds, those changes are playing out against a backdrop of robust local demand, moderating rent growth, and a sales market that continues to funnel prospective buyers back into the rental pool.
The Renters’ Rights Act: What Has Changed?
The Act represents the biggest overhaul of private rented sector legislation in more than 30 years. It affects an estimated 11 million renters and 2.3 million landlords across England.
Its most significant reform is the abolition of fixed-term Assured Shorthold Tenancies (ASTs) and the end of so-called “no fault” Section 21 evictions. From 1 May, almost every existing AST in England converted automatically into an Assured Periodic Tenancy. Tenancies now roll month to month. Landlords must cite a specific legal ground under Section 8 if they wish to regain possession.
For tenants, this is a meaningful shift in security. Landlords can no longer serve notice without reason. Grounds for possession must now be evidence-based — whether that is a genuine intention to sell, redevelop, or move into the property, or a demonstrable tenant default such as significant rent arrears or anti-social behaviour. Tenants can now plan their lives with more confidence and raise maintenance concerns without fear of retaliatory eviction.
For landlords — and their agents — the transition has required careful preparation. The Act requires landlords to provide tenants with a written statement of key tenancy terms before a tenancy begins. It limits rent payments to no more than one month at a time. It restricts rent increases to those served via a formal Section 13 notice, with advance notice required. It also gives tenants a new right to request a pet.
Further measures follow later in the year. These include a new Private Rented Sector Landlord Ombudsman service and a national landlord database.
The South Cotswolds: A Market in Good Health
Against this legislative backdrop, how is the local rental market performing? The picture for the South Cotswolds is, on balance, a positive one — particularly for well-managed, well-presented properties.
ONS data shows that average monthly private rents in the Cotswold local authority area reached £1,262 in April 2026. That is an annual increase of 8.3% from £1,165 the previous year — well above the South West regional average rise of 5.1%, and significantly above the national average. Tenant demand continues to outpace available supply. This has kept rents firm even as growth has begun to moderate from the exceptional peaks of 2024, when some parts of the Cotswolds saw rental growth in excess of 20%.
Local market data illustrates this transition clearly. Available rental stock in the area has increased by approximately 16.8% year-on-year, while agreed lets have fallen by around 4%. The market is moving towards greater balance. Tenants have more choice than they did 18 months ago and are taking longer to commit.
Landlords who price accurately and present their properties well continue to attract strong interest. Those who are slow to respond to the new market reality are finding properties sitting vacant for longer.
At the premium end — properties let between £3,000 and £10,000 per month — demand remains resilient. Tenants are willing to pay for quality, but they are increasingly discerning about value.
The Broader England Picture
The latest Zoopla Rental Market Report (June 2026) presents a mixed national picture. On the surface, average rents for new lets across the UK have risen by just 2.1% over the past year, to £1,321 per month. But that relatively modest headline conceals significant local variation. In three quarters of areas across the country, rents are actually rising faster than the national average. The underlying cause is straightforward — across every region of England, the number of available rental homes remains 20% to 30% below pre-pandemic levels. That persistent shortage of supply continues to push prices upward.
ONS figures confirm that the annual rate of private rent growth has slowed to 3.4% — the lowest since March 2022, down from a peak of 9.2% in early 2024. The post-pandemic surge is cooling towards what analysts hope will be a more sustainable trajectory. Forecasters including Zoopla and Cushman & Wakefield expect rental inflation to sit in the 2–3% range for the remainder of 2026, though local conditions vary significantly.
Tenant behaviour is also shifting. The new Act gives tenants greater security of tenure, and many are now choosing to stay put rather than move. This reduces vacancy rates for landlords with good, settled tenants. It also means fewer properties return to the market for reletting — a supply constraint that supports rents over the medium term.
How the Sales Market Is Underpinning Rental Demand
Perhaps the most consistent driver of rental demand — locally and nationally — is the state of the sales market. Average house prices in the Cotswold area stood at around £406,000 in March 2026. First-time buyers paid an average of £310,000. Mortgage rates remain elevated relative to the historic lows of the 2010s, and borrowing costs continue to stretch affordability. A significant cohort of would-be buyers is staying in the rental market by necessity rather than choice.
The national sales picture tells the same story. Rightmove reported average asking prices rising 1.2% in May 2026, but agreed sales remain broadly below 2025 levels. Affordability constraints — particularly for first-time buyers — are keeping renters in the system for longer than they might otherwise choose. This structural dynamic shows no sign of reversing quickly.
There is a further, perhaps counterintuitive, dynamic at play. Some landlords are choosing to exit the market. Higher regulatory obligations, increased costs, and the removal of Section 21 are prompting a number of smaller portfolio landlords to sell. Owner-occupiers generally absorb these former rental properties — a process that modestly tightens the pool of available rental stock. But the tenants displaced by those sales must rent elsewhere, and that further sustains demand.
Analysts caution against overstating the so-called “landlord exodus.” Verified market data shows that while some landlords are exiting, the market remains active, rental stock remains sufficient in most areas, and demand continues to outpace supply across much of the country.
Looking Ahead
For landlords navigating the post-Act landscape in the South Cotswolds, the fundamentals remain sound.
Demand for quality rental homes is strong. Rents are still rising ahead of inflation in many local areas, even if growth has slowed. And wage growth running at close to 4% nationally is helping to support tenant affordability.
The key shift is one of expectation and professionalism. The Renters’ Rights Act has raised the bar for landlords and their agents. Greater compliance obligations, more considered tenant vetting, and a longer-term relationship model with tenants are now the new normal. For well-prepared landlords, this need not be a source of anxiety. It is simply the framework within which a healthy, fair, and sustainable rental market operates. The South Cotswolds — with its enduring appeal, its shortage of quality rental stock, and its deep pool of prospective tenants — remains one of the more resilient rental markets in the country.
If you are a landlord or tenant with questions about how the Renters’ Rights Act affects your property, please get in touch with our team on 01666 338866 or through our Contact Us page.
