Rental market headline takeaways

We are one month into the new world that is post the Renters’ Rights Act and there have been a few discussions with residents not wanting to give two months’ notice (‘no one told me’ and ‘it’s not fair’) and two residents asking for pets at 09:01 on 1st May… so, I can’t report any significant changes. However, as I have mentioned many times most of the legislation will be tested by case law, it’s only then we can see the real outcome.

Tenant demand has remained at the levels we saw in 2023 and remains steady, but again there is more choice, and we have seen more deals fall through as applicants have hedged their bets as there is more choice out there. The properties that move the fastest not surprisingly are well-presented, near amenities and are correctly priced. We are seeing more people enter the market that have sold a property and are now choosing to rent while they figure out tier next move.

From a landlord’s perspective, we’re also seeing more properties return to the rental market after struggling to sell. With the shortage of high-quality rental stock still very real, it’s creating strong competition and pushing rental prices higher, alongside a calibre of tenant that feels as strong as it’s been for a long time.

My feeling continues that it is not a tenant’s market. It is a professional landlord’s market.

Key Cambridgeshire rental market figures – May 2026

• Demand continues to outstrip supply with JLL’s rental forecast, which was upgraded in May, expects demand to rise 3.5%, up from 2.5% in the UK. It says this reflects fewer tenants moving into owner-occupation, as well as the impact of the Renters’ Rights Act. This includes restricted supply as landlords exit the market and an expected increase in prices due to the end of competitive bidding.
• Average rent across our managed portfolio: £1235 pm (6 % increase year-on-year) and a 3.3% increase from April. This means that the region we work in is doing far better than The HomeLet rental index which only showed a 1.1% increase month on month in April.
• Rents are now 2.5% higher than in May 2025, when the average was £1,307.
• Average rent for a 3-bed property: £1298 pm (6% up in May 2025)
• Average yield in the area (Rightmove) 6.5%
• Properties advertised locally: 12% higher than May 2025
• Percentage of properties let agreed: Same as last year
• Primary reason residents move: relocating out of area (32%)
• Second highest reason: purchasing a property (24%)

What’s happening in the overall housing market

The most recent landlord insights from Pegasus have reported that four in ten landlords are planning to refinance in the next 12 months. As property prices reduce there are deals to be had. The latest RICS UK Residential Market Survey, out at the end of May today, suggested a weak market will continue through the summer.

The Leasehold and Commonhold Reform Bill has already started its journey into law, but there continues debate over the timescale for the reform. The government are aiming to make common hold the default tenure for new flats and to strengthen leaseholder rights. But we have no idea when this might happen.

Household growth the East of England is forecast to reach 18%. Obviously, this increase will stretch housing demand even further. The report shows that there’s a growing imbalance between supply and demand, with more than 1.3m households on local authority housing registers in 2025 and more than 320,600 social homes projected to be lost by 2040 if current trends continue.

Last month we reported that posts on X and Instagram in April (from screen shots screenshots of HM Land Registry and Rightmove data) showed the type of price falls that happened six months ago. The first example was a one-bedroom flat in Chelsea, purchased in February 2016 for £800,000 and sold in July last year for just £590,000 – a 26% loss. Another one-bedroom apartment – this time in Croydon – was purchased in February 2019 for £350,000 but sold in July last year for only £230,000 – a 34% fall.

Makeup of available rental properties in the area

Two-bedroom homes continue to dominate the Cambridgeshire rental market. However, we have seen a big increase in three-bedroom properties becoming available. From our data it shows that the increase in three bed homes has been down to the landlords, hoping to sell six months ago have not achieved a sale and therefore have returned to the rental market.

Which means given average rental they will have lost £7,000 – £10,000 in rental and utility costs.

Three bedroom properties do rent quicker as they attract a wider audience and tend to have longer tenancies as there is a higher proportion of families that take residence. For investors as long as the asking price is correct you can still achieve a 5 – 6 % return in the local area.

Stock levels – what’s available to rent?

Rightmove data for May shows a continued increase in available rental properties, 12% higher than the same time last year. However, as you can see from the graph below, this month is showing a slowdown on the increase we have seen over the last few months.

With greater choice available to applicants, pricing strategy is critical. Rental properties must be positioned correctly from day one to avoid extended void periods.

Why have stock levels been increasing

As mentioned, before we have seen a higher number of landlords revert back to the rental market where they have not been able to sell. These properties have been out of the rental market for anything between six and nine months.

An interesting piece in the UK Property Advice Community which gives a reason for this happening stated:

• Only 50% of the homes that come on to the market sell.
• 53.5% of sellers successfully moved.
• If a home has not sold within 12 weeks it only has a 14.5% chance of selling.
• If a home secures a sale agreed within the first 25 days because it is realistically priced. It has a 94% chance of reaching exchange and completion. Wait until 100 days to agree a sale that drops to 56%.
• Since 2001 UK homes have sold within roughly 0.9% to 1.3% of the final asking price – that’s not the original.

Going forward the Renters Rights Act may lead landlords to be more cautious about testing the sales market. As the new rules dictate, that a property which was previously rented and put up for sale cannot come back onto the rental market for 12 months from the end of the tenancy if it has not sold. As mentioned, many times before, if you want your property to let it must be priced correctly and make sure that your property sticks out from the crowd. Believe me, first impressions count even for rental property.

Does your property advert:

• Have a blue sky or a twilight shot ie has effort been put into the presentation
• Have images that fill the space, or are you seeing wide black margins
• Have updated description showing amenities
• Compare favourably with the competition – unless you have something special, bear in mind what void periods can do to your business.

As there is more choice on the market compared with last year it is critical that your property has standout marketing, accurate pricing, and quality presentation. This means that homes are taking longer to let and are more likely to be reduced in price as applicant choice increases.

What do tenants pay more for

A new study by Simply Business revealed the most desirable property features for renters. And it’s counter space, good ventilation, large windows and space for a double bed that top the list.

The research commissioned by the insurance provider takes a room by room look at what matters most for renters. In short, they found that Renters prioritise practicality.

Sufficient counter space tops the kitchen wish list for half of all renters (50%), making it the single most sought-after feature across the entire home.

Storage (41%) and natural light (40%) follow closely. In contrast, kitchen islands – often held up as the ultimate selling point – are most important to just one in ten (10%).

In the bathroom, good ventilation (41%) and water pressure (40%) rank above modern fixtures (21%), heated towel rails (11%) and heated flooring (6%).

In the bedroom, lots of natural light (46%), space for a double bed (67%) and built-in wardrobes (45%) are non-negotiables while renters prioritise larger windows (43%), space for a corner sofa (27%) and access to the outside or French doors (26%) in the living room.

A private garden leads the way at 44% across all respondents.

Overall, parking (31%), an en-suite (29%), a garage (24%) and a high energy efficiency rating (21%) round out the top five.

Most wanted features:

Kitchen

1. Sufficient counter space – 50%
2. Ample storage – 41%
3. Natural light – 40%

Bathroom

1. Good ventilation – 41%
2. Good water pressure – 40%
3. A bathtub – 35%

Bedroom

1. Space for a double bed – 67%
2. Natural light – 46%
3. Built-in wardrobes – 45%

Living Room

1. Large windows – 43%
2. Space for a corner sofa – 27%
3. French doors/outdoor access – 26%

Activity in the Cambridgeshire market

Across the areas we work in 167 properties were let in May. This is the same as compared with May 2025. But as you can see from the graph below this is the highest achieved since January.

Applicant demand

Applicant numbers have continued to drop when compared to April 2025. But when you compare a normal market ie 2023 they are on parr. Affordability appears to be the defining factor, and we are seeing more people looking at house shares.

There still remains a healthy level of enquiry when properties are correctly priced.

Why do people rent?

You only need to look at the alternative. The cost of getting a mortgage on an average house in the area is now £1,136 per month (at 4.6% on 25-year loan) against an average monthly rental cost of £1,196. However, you also need to consider the deposit, which at the present level of rents is hard to accumulate, and it means if the boiler goes the resident does not need to pay for it the landlord does.

Recent research by Zoopla suggests that almost two thirds of young homeowners (18–34-year-olds) now feel that owning a property holds less importance than it did for their parents’ generation. This declining emphasis on permanence has seen almost half of this group anticipating moving home within the next five years, decisively rejecting the notion of settling in one house for life.

In addition, a Sky News report claims rents now take 36.1% of tenants’ average earnings – the highest level on record. Therefore, they are more likely to stay where they know there are no issues.

Rental trends – local breakdown by postcode

Each month we review the rental price by post code and bedrooms. What this table shows is for the main areas we manage properties the rents have increased 6% year on year and the average rental now stands at £1,235. This type of information will be very valuable now that the Renters Rights Act requires any Section 13 (rental increase request) to be evidence based.

Private renting is changing – but that’s not always a bad thing

For some months now we have been saying that the market is rebalancing and against everything that is written in the media we have been showing you how the market is evolving – and for landlords who are ready to adapt, there are real opportunities. Agreed some landlords are choosing to leave the sector, but this isn’t just a reaction to regulation or bad press.
Many are doing so for very personal, practical reasons – retirement, changing family circumstances, or simply wanting to cash in on decades of growth. In many cases, it’s the natural next step. All this means is that the landlord profile is shifting. The market is becoming more professional, with fewer “accidental landlords” and more investors focused on doing it properly – and profitably.

Why are some landlords selling up?

There’s no denying the sector has become more complicated. Regulation is increasing – from EPC targets to the Renters’ Rights Act – and managing properties isn’t as straightforward as it once was. For landlords who entered the market in the ’90s or early 2000s, many are now retiring or passing properties to children who may not want to take them on. However as mentioned above, a good majority of them are returning to the market as the properties do not sell.

As some landlords exit, we have seen others step in. Professional landlords, property companies, and well-capitalised investors are still buying and they’re doing it with a long-term mindset: focusing on quality homes, strong management, and sustainable returns. We have seen this in the portfolios we manage for landlords that do not want to own property to take away time from the day job.

Demand for quality rental homes remains incredibly strong. Even before properties are fully refurbished, we have good residents who want to move into a larger property as the family grows and those that want less space.

What does this mean for landlords like you?

I feel the shift presents an opportunity. For landlords who are prepared to have their properties managed professionally whilst others stay ahead of regulation changes for them. The days of “set and forget” lettings might be behind us. But that doesn’t mean the private rental sector is no longer viable.

Far from it. It simply means landlords need to be more strategic and better supported. We don’t believe the market is shrinking – we believe it’s maturing – and that’s a good thing for landlords who take their role seriously.

We’re here to help navigate the changes – whether you’re staying in for the long haul or reviewing your options. That is why we use all of the data we hold to share with you what is actually happening in our local area.

Why we share this data

Understanding where your property sits within the Cambridgeshire rental market allows you to maximise rental returns, reduce void periods, maintain compliance, and make informed strategic decisions.

If you would like a data-led review of your current rental value, compliance position or portfolio performance, we are always happy to have a strategic conversation.

Why not book a call and see how we can help.