UK Rental Market Outlook: Growth Slows, Market Rebalances as 2026 Begins

Posted on Friday, 23 January, 2026

The UK rental market entered the end of 2025 with a noticeable shift in direction: while rents continued to rise on an annual basis, the pace of growth has slowed considerably, and competition between tenants eased compared with the fevered activity seen during the pandemic years.

Rents: Growth Continues, But Slows Sharply

According to the latest Rightmove Rental Price Tracker for Q4 2025, the average advertised rent outside of London fell by 1.1 % compared with the previous quarter, dropping by around £15 to approximately £1,370 per calendar month. This marks only the second quarterly decline in five years.

Across the full year of 2025, however, average rents still increased by 2.2 % compared with 2024. Although positive, this annual rise is the lowest year-on-year growth recorded since 2018, indicating that rental inflation is moderating.

In London, a similar pattern emerged: rents were marginally down quarter-on-quarter (-0.7 %), taking the average advert-ised rent to about £2,716 per month; this still translated into modest growth for the year overall (+0.8 %).

Regional Rental Dynamics

Growth across regions remained mixed in 2025:

The North West and Yorkshire & The Humber saw the strongest annual increases at +3.6 % and +3.1 % respectively.
The North East and London recorded the slowest annual rises, at +0.4 % and +0.8 % respectively.

Supply vs Demand: A More Balanced Market

While rental supply remains well below long-term norms, the number of homes available to rent was 9 % higher than this time last year. Despite this improvement, the total number of rental properties on the market remains a third lower than it was a decade ago, underscoring a persistent supply shortage.

Tenant competition also eased. In 2025, there were an average of 10 enquiries per available rental home, compared with 14 enquiries per listing in 2024, and just six in the pre-pandemic year of 2019. Notably, demand still varied regionally — in places like the North West and Scotland, some properties received more than 16 enquiries each on average.

Landlord Investment and Mortgage Affordability

Rightmove’s rental tracker also highlighted improvements on the landlord finance side. Lower buy-to-let mortgage rates have made it cheaper for landlords to invest or hold onto existing rental stock, which is seen as a key factor that could support future increases in rental supply.

Outlook: Rents Expected to Climb Further in 2026

Looking ahead, Rightmove predicts that average advertised rents across the UK will rise by around 2 % in 2026, reflecting a gradual return to rental inflation but at moderate levels compared with previous years. This forecast reflects a rental market finding a new balance between supply and demand, even as underlying structural shortages continue to underpin modest upward pressure on rents.

What It Means for Tenants and Landlords

For tenants:

The slowdown in rent rises — and occasional quarterly declines — brings slightly improved affordability, especially outside London.
Eased competition may offer renters more choice and negotiation leverage compared with the pandemic peak.

For landlords:

Improved mortgage affordability and modest demand suggest a more stable environment for buy-to-let investment.
However, supply remains tight long-term, so effective property management and realistic pricing continue to be essential.

Source: https://www.rightmove.co.uk/