Rental growth has slowed sharply, with annual increases now sitting below both inflation and wage growth for the first time in several years—a clear sign the market is beginning to rebalance after an overheated period. For landlords, the shift points to a sector edging back toward stability following years of intense competition for homes.

According to the latest Industry Rental Index, average rents in England rose by 2.4 percent in the year to January 2026, a steep drop from the 4.6 percent recorded a year earlier. The typical monthly rent now stands at £1,201, up only modestly from £1,174 twelve months ago.

Tenants are finally seeing real-terms relief, with rent rises now trailing both consumer inflation at 3.6 percent and wage growth at 4.5 percent after years of increases outpacing earnings.

The North East saw the strongest annual rent growth, rising 6.1 percent to an average of £829 a month. Several other regions—including the East Midlands, North West, South East and South West—also posted increases above 3 percent.

The East of England was the clear outlier, recording a 1.9 percent annual decline in rents, making it the only region where prices fell over the year.

In London, rents edged up just 1.9 percent to £2,139 a month. Despite remaining by far the most expensive part of the country, the capital’s growth rate lagged well behind the national average.

Signs of a cooling market are also evident in rising void periods, which stretched from 23 to 26 days in January. Six of the nine regions recorded longer gaps between tenancies, with the North West seeing the sharpest jump as voids increased from 18 to 26 days.

In the East of England, empty periods climbed from 21 to 32 days, reinforcing the picture of weakening demand in a region already experiencing falling rents.

London was the only area to see voids shorten, underscoring the continued pressure on the capital’s rental market despite slower price growth. This mirrors wider analysis suggesting many tenants are effectively locked into their current homes due to affordability constraints.

The Rental Index, which analyses more than 100,000 tenancy agreements each month, offers one of the clearest snapshots of current market conditions.

For buy-to-let landlords, the latest figures indicate that the extraordinary rent rises of 2023 and 2024 are easing back to more typical levels. Rents are still increasing, but no longer at a pace that outstrips inflation or wage growth—a shift that may help reduce political scrutiny of the sector.

Even so, regional fortunes remain uneven. Landlords in the North East continue to benefit from some of the strongest growth in the country, while those in the East of England may face tighter returns as rents edge into reverse.