High rents and rising BTL mortgage rates are forcing landlords and their brokers to rethink portfolio strategy
Average advertised rents have cleared £1,400 per calendar month for the first time. Rightmove’s Q3 2026 Rental Trends Tracker puts that milestone front and centre, changing the refinancing conversation for brokers in the buy-to-let market.
Outside London, the national average reached £1,418 per calendar month in the quarter to September 2026, Rightmove reported. That represents a 1.5% rise on the previous quarter and 2.4% year-on-year. Growth has slowed from the double-digit annual rates seen between 2021 and 2023.
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What is driving rents higher?
Supply remains the dominant pressure. Available rental homes nationally are down 2% year-on-year. Renter demand has also eased by 2%, pointing to a market that is constrained rather than overheating.
London presents a different picture. The capital’s average advertised rent hit £2,825 per calendar month in Q3 2026. That’s 3.2% higher than a year earlier, outpacing the national rate.
Rental supply in London is under greater strain. Available listings are down 9% annually, newly listed homes are down 7%, and renter demand is up 6%.
Higher mortgage rates are keeping would-be buyers in the rental market for longer. In London, office return requirements are drawing tenants back too. Both forces compress supply at the same time.
This mirrors a broader pattern across the UK rental sector in 2026. Rental supply has been falling as mortgage rates push up borrowing costs for landlords, reducing the stock available to renters in markets already running short.
| Region | Average asking rent | QoQ change | YoY change | Average yield |
|---|---|---|---|---|
| Scotland | £1,160 per month | +2.1% ▲ | +3.0% ▲ | 7.9% |
| North East | £983 per month | +1.1% ▲ | +3.5% ▲ | 8.3% |
| Yorkshire & Humber | £1,131 per month | +1.7% ▲ | +3.5% ▲ | 7.4% |
| North West | £1,273 per month | +0.8% ▲ | +2.6% ▲ | 7.4% |
| East Midlands | £1,244 per month | +2.2% ▲ | +3.0% ▲ | 6.9% |
| West Midlands | £1,284 per month | +1.8% ▲ | +2.9% ▲ | 6.9% |
| Wales | £1,136 per month | +1.0% ▲ | +1.7% ▲ | 6.9% |
| East of England | £1,697 per month | +1.5% ▲ | +1.7% ▲ | 6.4% |
| South West | £1,532 per month | +1.9% ▲ | +2.2% ▲ | 6.4% |
| South East | £1,959 per month | +1.5% ▲ | +2.1% ▲ | 6.4% |
| London | £2,825 per month | +1.2% ▲ | +3.2% ▲ | 6.1% |
| Source: Rightmove Rental Trends Tracker Q3 2026 (July–September 2026). Based on 437,652 asking rents on Rightmove.co.uk | ||||
What do rising buy-to-let mortgage rates mean for landlord clients?
The two-year fixed buy-to-let rate now stands at 5.34% on a 75% LTV product, up from 4.16% before the war in Iran started. That 118 basis point rise materially changes the investment case for new landlords and adds refinancing pressure for existing ones.
Matt Smith, Rightmove’s mortgage expert, said that managing existing properties at remortgage time is now one of the most pressing challenges for landlords. “New buy-to-let investment has been relatively subdued for some time, and some landlords are still reaching the end of much cheaper fixed-rate deals taken out when borrowing costs were lower.” He added that where the numbers no longer stack up, higher mortgage costs could ultimately influence decisions about whether to remortgage or sell.
The advice conversation is shifting from acquisition to portfolio management. Clients tied to older, cheaper fixed deals need clear guidance on whether to refinance, restructure, or exit. The Renters’ Rights Act and a wave of maturing fixed-rate products are reshaping the lending pipeline.
Fewer properties are entering the rental market from the sales stock — that share has dropped from 17% to 15% this year. That reduction feeds directly into the availability constraints pushing rents higher.
What the regional picture shows
Yield data outside the capital offers a mixed signal. The North East leads at 8.3% in Q3 2026, followed by Scotland at 7.9%. North West and Yorkshire and The Humber both sit at 7.4%.
London, at 6.1%, sits at the lower end despite its sharper annual rent growth of 3.2%. The strongest yields and the fastest rent growth are not in the same markets, pointing to different client conversations depending on geography.
Solihull in the West Midlands recorded 26% annual rent growth in the rental price hotspot data. Sevenoaks in Kent reached 25.6%, and Lytham St. Annes in Lancashire hit 22.5%.
These pressures are not confined to the capital. They are playing out in commuter belts and northern markets where buy-to-let remortgage activity is reshaping broker pipelines ahead of further fixed-rate maturities.
“London’s rental market is showing renewed pressure, with rising tenant demand and fewer available properties increasing competition for the best homes,” said Kesha Foss-Smith, head of Lettings at John D Wood & Co. She noted that higher mortgage costs are trapping some would-be buyers in the rental market. That adds to demand, particularly for smaller properties.
Kim Lidbury, president of ARLA Propertymark, the Association of Residential Letting Agents, said the figures should not be judged on rental growth alone. “Although rental growth has moderated, advertised rents remain at record levels, and the availability of suitable homes continues to be a major concern for tenants," she said. "A slowdown in rental growth is welcome, but it will not, on its own, resolve the affordability challenges facing renters.”
For mortgage professionals, the Q3 2026 data shows that rents are rising and yields in many regions remain attractive. Financing costs and buy-to-let mortgage rates have risen enough to shift the viability of new investment.
The opportunity is still there, but how much depends on where individual clients are positioned and what their deal looks like at renewal. There is room for cautious optimism in the buy-to-let sector for brokers prepared to engage.
