RICS May 2026: landlord instructions at -28%, rent expectations at +36%, the highest in a year. Average completion time hit 21.5 weeks, longest since 2017. The post-Section 21 rental market is not recovering its supply. Investors still in the market are seeing that in their void times and enquiry volumes.
What Has Happened?
RICS published its May 2026 UK Residential Market Survey this week. The timing is significant: May was the first full calendar month after the Renters' Rights Act came fully into force on 1 May 2026, abolishing Section 21 and converting all assured shorthold tenancies into rolling periodic assured tenancies. This is the first comprehensive agent survey covering landlord and tenant behaviour under the new regime.
On the rental side: landlord instructions came in at -28% net balance. That figure represents the gap between RICS surveyor respondents reporting more rental properties coming to market and those reporting fewer. At -28%, it is the weakest reading since December 2025, and it is worse than -17% recorded in April and -25% in March. The trend is not stabilising post-abolition; it moved further negative in the first month after the Act went live. Tenant demand held at +14%, meaning significantly more agents are reporting rising demand than falling. Rent expectations for the coming months reached +36%, the highest reading since May 2025, indicating that agents expect upward pressure on rents to continue.
The sales market data sits in sharp contrast. House prices came in at -35% net balance. New buyer enquiries at -34%, unchanged from April, which RICS noted as the first month since January 2026 without a further deterioration (a low bar). Agreed sales: -37%. The indicator that most directly affects investors trying to buy: average time from listing to completion reached 21.5 weeks in May, the longest recorded since the dataset began in 2017. That is over five months from offer accepted to exchange and completion, before accounting for any complications.
ONS Private Sector Rent Statistics for the year to April 2026, published in May, show the average UK private rent at £1,381 per month, up 3.5% year on year. Regional variation is substantial. The North East led all English regions at 6.5% annual growth, with an average rent of £776 per month. London recorded 2.0% growth at £2,290 per month, the lowest of any English region, reflecting affordability ceiling effects. Yorkshire and the Humber and the East Midlands both exceeded 4% annual growth. Across the UK, Zoopla's March 2026 rental market report confirmed total rental supply remains 23% below pre-pandemic levels.
Why This Matters to UK Property Investors
The RICS May data gives investors the first proper read on what the post-Renters' Rights Act rental market looks like. A lot of the pre-May 2026 commentary about what would happen to supply was prediction. The -28% landlord instructions figure is measurement. Landlords are pulling back from the market. That is happening regardless of what anyone forecast in either direction.
For investors who have not exited, the supply-demand picture in the rental market is improving. Fewer available properties competing for more tenants means shorter void periods and stronger grounds for rent increases under Section 13. The Section 13 Form 4A process, the only mechanism for rent increases now that Section 21 has gone, depends on demonstrating that the proposed increase reflects genuine local market rates. With rents growing 6.5% annually in the North East and 4% or more across several other regions, that evidential case is easier to make than it has been for a while. RICS rent expectations at +36% confirm the direction.
The stalling sales market changes the acquisition environment too. A -35% house price net balance and 21.5-week average completion time means vendors who listed in January or February 2026 are now four to five months into their sales process. They are not achieving their asking prices and they are not moving quickly. That is the context where BTL acquisitions happen below market value. Sellers with long listings in a slow market respond to certain, chain-free buyers in a way they do not when properties are shifting in eight weeks.
There is a specific connection between the rental supply contraction and the acquisition opportunity that tends to get missed. The landlords driving that -28% reading are the same people creating the motivated seller supply on the sales side. They are exiting the rental market, but they are doing it through the sluggish sales channel where they are competing with 21.5-week completion timelines. They need buyers. That creates leverage for investors entering the market with certainty.
The Risks Investors Need to Understand
The -28% landlord instructions reading contains a timing distortion worth acknowledging. Some landlords who served valid Section 21 notices before 1 May 2026 have properties occupied by tenants whose possession claims are still running through the courts. Those properties are effectively unavailable for new lettings while the claim proceeds. As legacy Section 21 cases clear through summer and autumn 2026, some of that supply will return to the rental market. The May reading may be near the low point for this particular distortion. Whether instructions stabilise or fall further depends on how many new landlords decide to exit on top of the legacy wave.
Rent expectations at +36% are forward sentiment, not actual rent increases delivered. A Section 13 Form 4A rent increase notice requires two months' notice and must reflect genuine local market rates. Tenants can challenge it at the First-tier Tribunal Property Chamber if they believe the proposed increase exceeds what comparable properties achieve in the area. The +36% expectation is real and directionally correct. Getting an actual above-inflation increase through Section 13 without a tribunal challenge requires documented comparable evidence, served correctly, on the right notice form.
The 21.5-week average completion time is relevant to both sides of an acquisition. An investor agreeing a purchase in June 2026 is looking at a November or December completion under average conditions. If the investor also needs to sell a property to fund the purchase, the same timeline applies to the sale side. The extended timelines are not exceptional cases; they are the average. Building them into deal projections and cash flow planning is not optional.
The Bank of England MPC meets on 18 June 2026, one week away. Market consensus as of this week is a hold at 3.75%. But inflation projections from energy and food costs, with supply disruption in the background, have pushed some analyst forecasts to a rise of 0.25 percentage points before December 2026. In the first two weeks of June, lenders including NatWest, Barclays, Santander, Halifax, Coventry Building Society, Gen H and TSB trimmed rates on selected products. Total mortgage product availability reached 7,132, the highest since March 2026. That competitive window may not extend beyond 18 June if the Bank's forward guidance turns more hawkish.
Where the Opportunity Could Be
Vendors who have been on the market since January or February 2026 are now sitting on four to five month listings in a market where the average completion is 21.5 weeks. They have already absorbed the period where prices were holding better. At this point in a slow market, motivated sellers with long listings become negotiable. A BTL investor who can offer a chain-free purchase, with finance approved and solicitors instructed, is offering something those vendors genuinely want.
The North East is where the rental demand case and the acquisition opportunity overlap most clearly right now. Sunderland SR1 to SR4, Middlesbrough TS1 to TS5, Hartlepool TS24 to TS26. Average gross BTL yields at 9.2% to 9.3% (Hamptons and Zoopla data). Two-bed terraces at £80,000 to £120,000 with established tenants already paying £600 to £750 per month. ONS confirms North East rents growing at 6.5% annually. The RICS rent expectations reading of +36% applies nationally but with particular force in a region where the supply crunch is sharpest relative to the employment and population base.
Manchester M1 to M3 and Leeds LS1 to LS2 are the city centre play for investors who want yield and exit liquidity. Gross yields of 5.5% to 6.5%, tenant pools covering students, young professionals and corporate relocators, and a resale market that is more liquid than rural or coastal stock regardless of current completion timelines. These markets do not offer 9% yields. They offer 6% yields with lower void risk and a buyer pool on exit that northern market towns cannot match.
The mortgage timing angle is specific to this week. Lenders are cutting rates and product count is at 7,132. The June 18 MPC decision could move that picture in either direction. An investor with a deal agreed and a mortgage application in place has the clearest incentive to push that through before 18 June if rate certainty matters. For investors still in the search phase, understanding the rate lock options on current BTL products is worth five minutes with a broker in the next few days.
Arsh's Investor View
The number that tells the whole story is the month-on-month move in landlord instructions. March 2026: -25%. April 2026: -17%. May 2026: -28%. The abolition of Section 21 on 1 May did not produce a stabilisation. It produced an acceleration in the same direction. Landlords who had been holding on to see what the Act actually looked like in practice appear to have made their decision in May. The -28% reading is the answer to the question "will supply recover once the Act is in force?" Not in the first month, at least.
What I keep pointing people to is the split between the two markets. Rental: supply contracting, demand rising, rent expectations at a year high. Sales: prices falling, completion times at a record, transactions stalled. Both moving from the same source: the same landlords who are driving rental supply lower are the ones listing on the sales market. They're on both charts simultaneously. The rental supply crunch and the motivated seller acquisition opportunity are the same people viewed from different angles.
The 21.5-week completion time is an underrated number. I hear investors complain about it as a problem, and it is if you're the one waiting. But in a market where every property is taking 21 weeks to complete, the vendor who has been listed since February is on week 17 or 18. They are starting to feel it. They want to sell. An investor who comes in with certainty of completion and no chain is not just another buyer at that point; they're the best buyer available in a thin market. Certainty has real value in slow markets and right now it's not being charged for at full price.
On the June 18 decision: I'm not going to say "fix now" as blanket advice because mortgage decisions depend on your specific LTV, your loan amount and your cash flow position. What I will say is that the current product availability at 7,000+ is the best it's been since March, lenders are actively competing on price, and the window before the MPC meets is short. If you have a deal that works at current rates, the next seven days are worth moving on.
How Property Investor App Can Help
Property Investor App lists tenanted buy-to-let opportunities from motivated sellers across North East, Yorkshire, North West and city centre markets, with asking price, rental income and gross yield data in every listing. For investors looking to move before the June 18 Bank of England decision and lock in current mortgage product pricing, PIA gives direct visibility of chain-free deals from landlords who are exiting in the current wave. For landlords exiting the rental market and trying to sell in a slow sales market where completion times average 21.5 weeks, PIA connects you with portfolio buyers who can offer certainty of completion and close chain-free.
Key Takeaways
- RICS May 2026 UK Residential Market Survey: landlord instructions at -28% net balance, the weakest reading since December 2025, covering the first full month after Section 21 was abolished on 1 May 2026. Tenant demand +14%, rent expectations +36% (highest since May 2025). Landlord supply did not stabilise after abolition. It fell further.
- Sales market running in the opposite direction from rentals. RICS May: house price net balance -35%, new buyer enquiries -34% (first month without further deterioration since January), agreed sales -37%. Average time from listing to completion reached 21.5 weeks in May, the longest since the RICS dataset began in 2017. Properties listed in January 2026 are still in many cases not completing.
- ONS data to April 2026: average UK private rent £1,381 per month, up 3.5% year on year. North East led with 6.5% annual growth at an average of £776 per month. London recorded the lowest regional growth at 2.0%. UK rental supply remains 23% below pre-pandemic levels (Zoopla March 2026 Rental Market Report). The shortage is structural, not a monthly fluctuation.
- The landlord instructions reading moved from -25% in March to -17% in April to -28% in May. That is not a data anomaly. It reflects a cohort of landlords who waited to see what the Renters' Rights Act meant in practice and made their exit decision in May. Around 110,000 landlords are forecast to leave the private rented sector during 2026. The May RICS reading is consistent with that projection tracking as expected.
- Bank of England MPC meets 18 June 2026. Base rate 3.75%, market consensus holds. Inflation risks from energy and food costs have some analysts forecasting a rise to 4.00% before December 2026. In the first two weeks of June, NatWest, Barclays, Santander, Halifax, Coventry Building Society, Gen H and TSB trimmed rates on selected products. Total mortgage product availability reached 7,132, the highest since March 2026. That window is open today and could change after 18 June.
- Best acquisition case from current data: North East two-bed terraces in Sunderland SR1-SR4, Middlesbrough TS1-TS5, Hartlepool TS24-TS26 at £80,000 to £120,000 delivering gross yields of 9.2% to 9.3%, with rents growing 6.5% annually. Long-listed vendors in a 21.5-week-average completion market are negotiable. Chain-free investors with finance ready have genuine leverage on price.
Frequently Asked Questions
What does the RICS May 2026 UK Residential Market Survey show?
RICS publishes a monthly survey of its member surveyors across sales and lettings markets. The May 2026 survey, the first covering a full month under the Renters' Rights Act, shows: landlord instructions at -28% net balance (the weakest since December 2025), tenant demand at +14%, and rent expectations at +36% (the highest since May 2025). On the sales side: house prices at -35% net balance, new buyer enquiries at -34%, agreed sales at -37%, and average time from listing to completion at 21.5 weeks, the longest since the dataset began in 2017. The rental and sales markets are moving in opposite directions, both driven partly by the same legislative change affecting landlord behaviour.
How has Section 21 abolition affected rental supply in May 2026?
Section 21 was formally abolished on 1 May 2026 under the Renters' Rights Act. RICS May 2026 survey data shows landlord instructions at -28% net balance in May, worse than -17% in April. The expected stabilisation of rental supply post-abolition, which some commentators predicted once the legislative uncertainty resolved, did not materialise in the first month. Landlords appear to be continuing to withdraw properties from the rental market in response to the wider regulatory environment, not just Section 21 specifically. Zoopla's March 2026 Rental Market Report confirms total UK rental supply at 23% below pre-pandemic levels. The rental supply shortage is a structural feature of the current market, not a temporary reaction to a single piece of legislation.
Should buy-to-let investors act before the Bank of England decision on 18 June 2026?
The Bank of England MPC meets on 18 June 2026. Market consensus as of early June 2026 is a hold at 3.75%. In the first two weeks of June, multiple lenders including NatWest, Barclays, Santander, Halifax, Coventry Building Society, Gen H and TSB have trimmed rates on selected products and total mortgage product availability has reached 7,132, the highest since March. Whether that window extends beyond 18 June depends on the MPC decision and forward guidance. Some analysts have added a possible rise to 4.00% before December 2026 to their models based on inflation risks. Investors with a deal agreed and finance in place have an incentive to move before 18 June. Investors still searching should understand current rate lock options from their broker. This is not a universal instruction to fix: the right decision depends on your specific loan size, LTV and cash flow position.
What are the best regions for buy-to-let given the current rental supply crunch?
The rental supply crunch is a national phenomenon but its yield effect concentrates in markets where property prices are low relative to rents. North East England currently offers the strongest combination of rental growth (6.5% annually per ONS data to April 2026) and gross yield (9.2% to 9.3% per Hamptons and Zoopla) across UK regions. Sunderland SR1-SR4, Middlesbrough TS1-TS5 and Hartlepool TS24-TS26 are where the arithmetic is strongest. For investors prioritising exit liquidity and city centre tenant demand alongside yield, Manchester M1-M3 and Leeds LS1-LS2 offer 5.5% to 6.5% gross yields with stronger resale markets. Yorkshire and the Humber and the East Midlands both recorded above 4% annual rent growth in ONS April 2026 data and are worth comparing against the North East if lower entry prices are a constraint.
How does the stalling sales market create opportunities for BTL investors?
RICS May 2026 data shows the average time from listing to completion at 21.5 weeks, the longest since the dataset began in 2017. A vendor who listed in January or February 2026 is now four to five months into their sales process. At that duration, without a sale, vendors typically become more flexible on price. BTL investors who are buying chain-free, with mortgage finance approved and solicitors instructed, offer completion certainty that is genuinely valuable in a market where 21.5 weeks is the average. The same motivated seller dynamic applies specifically to exiting landlords: they are listing tenanted properties into a slow sales market, and a BTL investor who can complete chain-free and accept a tenanted property without requiring vacant possession is the most natural buyer. Both the pace of the market and the seller type point toward improved acquisition terms for properly prepared investors.
