Rents for newly let homes have declined for the third month in a row, signalling a broader slowdown in Britain’s rental market, according to new figures from a leading lettings agency.

Over the year to October 2025, the average rent for a new tenancy dropped by 0.5% to £1,399—marking exactly 12 months since rents hit a national high of £1,406 per month.

Inner London has led the downturn, with average new-let rents falling steadily since January which now sit at £2,795—£135 per month below last year’s peak. Outer London has followed suit, with declines taking hold since the summer.

Elsewhere in the South of England, the picture is mixed but softening. Rents in the South East showed no growth year-on-year, while the South West saw a marginal rise of 0.3%. In the East of England, rents edged up by 0.8%. Analysts suggest these modest gains could give way to declines in the months ahead as market pressures ease.

Tenant demand for new rentals continued to ease in October, with 12% fewer prospective renters searching for homes across Britain compared to the same month last year. This marks the third consecutive month of declining demand in all three southern regions outside London: the South East, South West, and East of England. At the same time, rental supply has improved modestly, with 8% more homes available to let than a year ago.

Despite the cooling in new-let activity, rents for tenants renewing existing contracts remain on the rise. Across Great Britain, renewal rents climbed 4% year-on-year to a new average of £1,310 per month. Even in London—where newly agreed rents are falling—the cost of renewing a tenancy increased by 3.2% over the past 12 months.

A lead analyst at the agency, says: “Despite rents falling annually for the third straight month, landlords are still managing to agree above inflation increases when it comes to contract renewals.  Typically, these are reducing the gap that opened up over the Pandemic between what tenants are currently paying, and what the property would achieve if it was re-let to a new tenant.”