Current rental market conditions are creating both challenges and opportunities for letting agents, as the approaching Renters’ Rights Act places greater pressure on them to demonstrate value to landlords, according to Mike Dawson, head of sales at HomeLet and Let Alliance.

Dawson says agents will need to do more to help buy-to-let investors navigate a more regulated environment, combining effective technology, strong processes, and clear communication to maintain and grow their landlord base.

He commented: “With the Renters’ Rights Act approaching, agents will be under more pressure to demonstrate value to landlords in a time of change for the rental sector.

“In this environment, securing the right tenants becomes more important than securing the highest possible rent. Advanced referencing and fraud prevention are essential to make sure suitable tenants are being placed, and more agents are utilising PropTech and integrated tenancy management systems to streamline processes and reduce compliance risk.

“Landlords are also looking for greater certainty around income in preparation for the new regulations, so products like rent guarantee, backed by strong legal support, can help agents stand out.”

Dawson’s comments follow the release of the latest HomeLet Rental Index figures which show that average UK rents fell slightly to £1,302 in January 2026, down 1.1% month-on-month from £1,317 in December. Rents are still slightly above what they were at the beginning of last year, up 2.4% from £1,271 in January 2025.

With London’s data excluded, the rest of the UK saw a drop of just 0.5% in the past month, from £1,124 to £1,118. This is 2.1% higher than January 2025’s figure of £1,095.

Average rents in the capital are dropping quicker than in any other region. The average for January is £2,078, 2.4% lower than last month (£2,129) and just 2.6% higher than in January 2025 (£2,025).

Rents across the country have fallen for the second month in a row, but this doesn’t look like a major drop or crisis as most areas are seeing only small decreases.

“This month’s Rental Index figures suggest a rental market that’s easing rather than correcting, which presents both challenges and opportunities for letting agents,” Dawson said.

Key Data from the January 2026 HomeLet Rental Index:

Average UK rent: £1,302 (-1.1% MoM, +2.4% YoY)

UK excluding Greater London: £1,118 (-0.5% MoM, +2.1% YoY)

Greater London: £2,078 (-2.4% MoM, +2.6% YoY)

Largest monthly changes:

Greater London: -2.4%

Northern Ireland: -1.7%

East Midlands: -1.6%

Strongest annual increases:

North East: +6.8% YoY

Northern Ireland: +5.5% YoY

Scotland: +4.9% YoY

January 2026 table: