Over the 12 months leading to April 2025, average rents for new lets rose by just 2.8%—a sharp slowdown compared to the 6.4% growth recorded a year earlier. This marks the weakest annual increase since July 2021, with the average monthly rent now standing at £1,287, reflecting a modest £35 rise over the past year.
Rental growth has decelerated across all UK regions, with Yorkshire and the Humber seeing the most significant slowdown. Rents in the region have dropped to 1.1% growth, down from 6.4% in 2024, largely due to weaker rental demand in key university cities. Sheffield - 1.9%, Bradford -1.4%, and Leeds -1.5 have all contributed to the overall decline. Meanwhile, in the North East, rental growth has fallen to 5.2%, a notable dip from 9.4% in the previous year.
Scotland has seen the rate of growth has slowing rapidly from 9.1 to 2.4% due to affordability pressures and the removal of rent controls which limited how much rents can be increased within tenancies. In Dundee, rental growth has slowed to -2.1%, down from 5.8% in 2024.
In London, rents are posting modest falls in inner London areas including NW London of -0.2% and WC London -0.6%. Overall, rental growth stands at 1.5%, with average rents of £2,175 pcm.
Rents have continued to increase quickly in more affordable areas adjacent to large cities such as Wigan (8.8%), Carlisle at 8.8% and Chester with 8.2%. The number of postal areas where rents have risen at over 8% a year has fallen from 52 a year ago to just five today.
The gap between the UK’s sales and rental markets has widened significantly, with rental price inflation far outpacing house price growth over the last three years.
Since 2022, average rents for new tenancies have surged by 21%, while house prices have increased by just 4%. Monthly rents have risen by £219 over this period—on par with the rise in average mortgage repayments. Annually, rental costs have climbed by £2,650, pushing the average from £12,800 to £15,450.
The recent deceleration in rental price increases is driven by weakening demand and affordability constraints rather than a rise in housing supply.
The site’s data indicates that rental demand has dropped by 16% over the past year, yet it remains more than 60% higher than pre-pandemic levels. A key factor behind this shift is lower migration into the UK for work and study, with long-term net migration falling by 50% in 2024.
Stabilizing mortgage rates and improved access to home financing are helping more first-time buyers—many of whom are renters—transition into homeownership. Recent adjustments in affordability assessments by banks are making it easier for higher-income renters to secure mortgages, reducing demand in the upper tier of the rental market.
Despite this cooling effect, rental supply remains tight. The number of available rental properties is still 20% below pre-pandemic levels, even with a 17% increase over the past year. A slowdown in new investment from both private and corporate landlords continues to constrain growth in the rental sector.
Looking ahead, UK rents are projected to rise by 3–4% through the remainder of 2025, reflecting ongoing supply pressures despite lower demand.
Richard Donnell, executive director of research at the property website, says :“Rents rising at their lowest level for four years will be welcome news for renters across the country. The average annual cost of renting is over £2,500 a year higher than three years ago, the same as the increase in average mortgage repayments for home owners.
“While demand for rented homes has been cooling, it remains well above pre-pandemic levels sustaining continued competition for rented homes and a steady upward pressure on rents. The pressures are particularly acute for lower to middle incomes with little hope of buying a home and where moving home can trigger much higher rental costs.
“The rental market desperately needs increased investment in rental supply across both the private and social housing sectors to boost choice and ease the cost-of living pressures on the UK’s renters.