Countdown to May: UK Rental Market Update (19 February 2026)

The clearest theme emerging from this week's data and commentary is one of convergence: multiple pressures, regulatory, fiscal, and financial, are arriving at the same time, and the sector has very little runway left to prepare. For letting agents and landlords alike, the weeks ahead will define who is genuinely ready for the new landscape and who is not.

The Top Headlines:

1) Renters' Rights Act: periodic tenancy templates due in March as May deadline approaches

With the 1 May 2026 deadline now firmly in sight, the government has confirmed that model periodic tenancy templates for England will be published at GOV.UK in March. This gives landlords and agents only weeks to review, update agreements, and train staff ahead of the legal changeover. From that date, all assured shorthold tenancies will automatically convert to open-ended periodic tenancies, Section 21 no-fault evictions will be abolished, rental bidding will be banned, and landlords will be prohibited from accepting more than one month's rent in advance. Civil penalties for non-compliance start at £7,000 and can reach £40,000, with criminal prosecution possible for the most serious breaches. Landlords must also provide every tenant with a government information sheet by 31 May 2026. Source

2) Court possession delays hit near two-decade high, before the new rules even begin

New Ministry of Justice data shows that in 2025 it took an average of over eight months to process and enforce Section 8 possession cases, the second longest average wait since 2005, exceeded only by the pandemic-distorted 2021 figures. This is happening despite falling case volumes: total private landlord possession claims dropped 7.8% year-on-year to 91,093, with Section 21 claims down nearly 13%. In London, eviction appointments are being scheduled seven to eight months after bailiff applications are submitted. The total journey from notice to enforcement can now approach twelve months in serious arrears cases. Source

3) HMRC urges landlords to act now: Making Tax Digital is eight weeks away

Making Tax Digital for Income Tax becomes mandatory from 6 April 2026. Landlords with qualifying gross income (i.e. rental plus any self-employment income exceeding £50,000 in the 2024–25 tax year) must now adopt HMRC-recognised software and begin submitting quarterly digital updates in place of the traditional annual self-assessment return. A soft-landing period means penalty points will not accrue for late quarterly updates in the first twelve months, though late year-end declarations remain subject to fines. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028, meaning the majority of landlords will eventually be caught. Source

4) May will expose who has and hasn't prepared for the Renters' Rights Act

Experts predict that consolidation will accelerate, with smaller landlords and under-resourced agencies exiting, while agencies that have invested in Section 8 ground workflows, Section 13 rent notice processes, and clear tenant communication will pull significantly ahead. Predictions also highlight a generational shift in landlord expectations. The newer, digitally native investors entering the buy-to-let market expect transparency, data access, and slick communication as standard. This places agents who have not modernised their systems at a competitive disadvantage. Source

5) Scotland: majority of rental properties sold are leaving the lettings sector

New data from SafeDeposits Scotland's Voice of the Landlord Survey reveals that 57% of rental properties sold in Scotland in 2025 moved into owner-occupation rather than remaining in the private rented sector, representing a significant leakage of supply. While this shows an improvement on 2024, when only 9% of sold properties stayed in the rental market (now 17%), the overall direction of travel remains concerning. Regulatory change is the most frequently cited reason for selling, at 38%, followed by negative attitudes towards landlords and rising repair costs. Critically, just 41% of landlords now feel able to keep up with regulatory changes, down from 51% in 2024, and only 21% believe policy changes are communicated clearly to them. Source

6) London housebuilding at its lowest since the Second World War

A new analysis finds that London started construction on just 4,170 homes in 2024/25, a fall of 72% on the previous year and the lowest annual total in over eighty years. In both 2027 and 2028, completions averaged 4,550 homes per year, which is well below the 10,000-plus consistently delivered every year since 1946. Across England, just 140,860 homes were completed in Labour's first year in office, 47% of the stated 300,000-per-year target. The research points to the Building Safety Regulator and second staircase rules as active impediments to construction, alongside planning delays and rising policy costs. Source

7) Proptech investment surges to platforms demonstrating scale and compliance benefits

Investor appetite seems to be shifting decisively from early-stage experimentation towards established platforms with predictable revenue, operational discipline and regulatory safeguards. For UK property professionals, demand is consolidating around tools that demonstrably reduce admin, improve compliance audit trails and assist with financial reporting, rather than around broad "AI" features without clear workflow application. Source

Why this matters

For letting agents and property managers, the opportunity is significant: landlords who are uncertain, under-prepared, or ill-informed will increasingly turn to agents who can provide clarity, sound process, and reliable documentation. Under the new Renters' Rights Act, professionalism and technology present the clearest competitive differentiators of 2026.