UK Living Roundup May 2026

The aftershocks of the May local elections in England (alongside Wales and Scotland’s parliamentary elections) continue to reverberate on a national level, with news rapidly developing around who is or isn’t jostling for the top job in government and what the impact of a possible leadership change could be. Any guesses are likely to be out of date by the time this arrives in your inbox. But what has definitely changed is the face of local government – and the scale of that change could have significant ramifications for housing.

In this roundup:

• The rise of ‘no overall control’
• Upgrading our rental forecasts
• What else we’re reading

While the 7 May elections were bruising for the Labour party and drove the news agenda about the future of central government, the local story was one of immediate change – and, as a result, uncertainty. In London, for example, plans for 35,000 homes are awaiting decisions. Half of these (50.3 per cent) are in councils that have now changed hands. The same is true for the roughly 6,500 BTR homes within these applications.

Although the London Plan sets out city-wide policies that councils broadly have to align with, this nevertheless means that the council-specific policy environment in which these applications were first submitted is not necessarily the one in which they will be decided. Boroughs known to be pro-development or more open to, for example, co-living, could well change course (the opposite could also be true in some instances).

Of course, change of leadership is not unusual in a democratic system. But what is unusual this time is the number of local authorities with no party in overall control, including nine of London’s 32 boroughs – the highest since the capital’s first local election in 1964. This is also the first time no party controls at least 10 boroughs and that the two largest parties between them control fewer than half of London’s councils.

How individual boroughs overcome a lack of a majority party will undoubtedly have an impact on planning decisions – to what extent rival parties can work together and make compromises, how effective negotiations between them are and whether any of this leads to a deadlock on policy.

This is particularly important for housing because, while there are nine councils without an overall majority (i.e. 28 per cent of London’s boroughs), they make up 39 per cent of pending applications by number of homes – and marginally more (40 per cent) for BTR specifically.

And this is not just a question for London. Birmingham and Leeds are now under no overall control, as are Bradford, Coventry and Milton Keynes, joining the swathe of district councils that are run by coalitions. With an increasingly kaleidoscopic electoral map, it is vital that developers keep a close watch on how policy evolves across the country. After all, this won’t be the end of the evolution of local politics: next year’s elections will see more seats contested in major cities like Liverpool, Glasgow, Edinburgh, Leeds and Manchester.

With fewer tenants expected to move into owner-occupation and inflation now forecast to end the year higher, we have upgraded our 2026 rental forecast. We now expect rents to rise 3.5 per cent nationally, up from the 2.5 per cent forecast in November. We anticipate higher rental growth in London too, with rents forecast to increase 3 per cent this year.

Challenges around rental affordability will likely constrain the prospects for more significant growth over the five-year period. Over the longer term, we continue to expect pressure on landlords to comply with EPC C standards by 2030 will fuel rental growth towards the latter part of our forecast period, as properties are removed from the market either for sale or improvement.

Rental growth in the five years to 2030 is now expected to total 16.5 per cent nationally and 17.1 per cent in London, a one to two percentage point increase compared with our previous forecast.

Our revised forecasts also coincide with the bulk of the measures in the Renters’ Rights Act coming into force at the start of May (you can read our explainer here). We expect this will also lead to some smaller landlords exiting the market, putting pressure on supply and rents in the process. However, the increased regulatory burden, coupled with stricter EPC standards, puts BTR in a favourable position as a professionally managed, high-spec rental offer under long-term ownership.

Our latest Prime Central London report is out, showing a contrasting picture in the capital’s housing market, with prices down 8.7 per cent annually and rents stable at 0.2 per cent. There was a rise of 13 per cent in the number of homes let in Q1 2026 vs the same period last year, but elevated stock levels have limited the potential for significant rental growth in the short term.

Meanwhile, our EMEA colleagues have released their latest Living Market Dynamics report, which shows the UK at the top of the table across several metrics – both positively and negatively. It shows that UK construction costs have risen more than the European average (3.6 per cent vs 3 per cent), but where the UK really deviates from the region is in planning permissions, recording the largest year-on-year fall at 27 per cent, compared to a European average of just -4 per cent.

Despite this, there is clear investor demand for UK living: the UK had the highest investment in EMEA in Q1 2026, with close to double the activity in the next most active market, Germany. Bolstered by a stellar quarter for PBSA, the UK accounted for 30 per cent of EMEA investment at the start of 2026 – up from 16 per cent this time last year.