February saw news stories about the Decent Homes Standard and John Lewis BTR investments take centre stage.
And as a reminder, there are now only two months until RRA implementation day.
Before we get to the news, let’s take a look at the recent rental market performance.
Rental Market Performance in February 2026
Here’s what happened in the English rental market last month:
- The average monthly price for a rental property rose 0.15% from £1,201 in January to £1,203 in February
- February’s average rent of £1,203 is up 2% compared to 2025 figures (£1,180)
- The average void duration fell to 22 days
- The base interest rate in the UK remained at 3.75%
HMRC urges landlords to prepare for major tax reporting change
HM Revenue & Customs (HMRC) issued a fresh reminder in February to landlords that the way they report their income tax is set to change from 6 April 2026.
Under the new Making Tax Digital (MTD) for Income Tax regime, more than 860,000 sole traders and property landlords with combined rental income above £50,000 a year will be required to keep digital records and submit quarterly income and expense updates through HMRC-approved software rather than relying solely on an annual Self Assessment.
HMRC’s Director of Making Tax Digital emphasised that the transition to quarterly reporting aims to reduce errors and help taxpayers spread their administration load throughout the year. A full annual tax return will still be due by 31 January after the end of the tax year, with the first MTD tax return for the 2026–27 year due by 31 January 2028.
To ease the transition, HMRC has confirmed that penalty points won’t be applied for late quarterly submissions in the first 12 months of MTD, and some taxpayers can apply for exemptions if they cannot use digital tools. However, affected taxpayers are being urged to start planning now and ensure they are ready with compliant software in place.
Government’s Decent Homes Standard criticised as “not fit for purpose” by independent regulator
An independent regulator has delivered a blow to the Government’s Decent Homes Standard (DHS) for rented housing, saying key parts of the policy case are “not fit for purpose.” The Regulatory Policy Committee (RPC) issued a “red” rating on 18 February, signalling that the evidence supporting the standard’s costs and benefits does not yet meet required government scrutiny.
The DHS, set to extend minimum house quality requirements to the Private Rented Sector under the Renters’ Rights Act, aims to ensure homes are free of serious disrepair, hazards and poor insulation. It would align standards across both social and private rented homes, with compliance expected by 2035.
However, the RPC found weaknesses in the Government’s impact assessment. It highlighted a failure to compare the chosen policy with realistic alternatives and noted that around 82% of the costs cited already arise from existing regulations, suggesting the assessment may be double-counting benefits. It also concluded that the proposal lacked a clear justification for why the new approach would deliver better outcomes than other options.
The red rating doesn’t automatically halt the policy, but it does increase pressure on the Ministry of Housing, Communities and Local Government (MHCLG) to revisit and strengthen its analysis. Ministers legally can proceed without revisions, but the rating raises concerns at a time when landlords are already adapting to tighter rules on safety and energy efficiency.
The last point is particularly important here. While this may wobble the DHS, it won’t tip the legislation over. As your estate agents, we would advise you to continue preparing the DHS and, as quickly as possible, ensure that your properties meet the standard.
John Lewis Partnership scraps major rental homes plan as housing venture falters
The John Lewis Partnership has abandoned its £500 million build-to-rent housing venture, cancelling plans to deliver nearly 1,000 rental homes in Bromley, Reading and West Ealing amid a tougher economic climate. The high-street retailer’s decision marks a significant retreat from its diversification plans first launched in 2020.
The partnership said a “fundamental shift in economic conditions”, including higher borrowing costs, inflationary pressures and a more cautious property market, had made the original business case unviable and created difficulties for its financial partner Aberdeen in securing funding.
John Lewis pulling back from the BTR market will spark a fresh debate about the UK’s ongoing housing crisis and who will step in to fill the gap.
Market chatter suggests a reframing is underway. Institutional exits do not mean the rental model is broken; they highlight that returns must align with risk. With fewer large players competing for stock or development sites, experienced landlords may see room to expand portfolios, particularly if they can refurbish, reposition or manage stock efficiently.
If anything, the shift reinforces a longstanding truth within the sector: private landlords remain the backbone of UK rental supply. And in periods of institutional retreat, those with expertise, local knowledge and steady financing are often best placed to grow.