Rental Prices Ease, Bbut Upward Pressure Remains
UK rental prices finally showed signs of cooling at the end of 2025, offering a little breathing space for tenants. That said, the wider picture suggests rents are still edging upwards, just at a slower and more measured pace.
According to Rightmove’s latest Rental Price Tracker, the average advertised rent outside London fell by 1.1% in Q4 2025, a drop of £15, bringing the monthly average to £1,370. It is only the second quarterly fall in rents seen in the past five years, which puts it firmly in context.
Across the whole of 2025, average rents outside London still rose by 2.2% compared to 2024. That is the lowest annual increase recorded at the end of a year since 2018, suggesting the rental market is starting to find a more sustainable balance.
London rents slow after years of sharp rises
The capital followed a similar pattern. Average rents in London fell by 0.7% in Q4, down £20 on the previous quarter. This left the average advertised rent at £2,716 per calendar month.
Over the year as a whole, London rents rose by just 0.8% in 2025. That is the lowest annual growth rate since 2020, when rents dipped during the early stages of the pandemic.
Regionally, rental growth varied significantly. Rents rose the least in the North East at 0.4% and London at 0.8%. The strongest increases were seen in the North West at 3.6% and Yorkshire and The Humber at 3.1%.
Rental supply improves, but shortages remain
One of the key reasons behind slower rental growth is improving supply. The number of available homes to rent is currently 9% higher than last year.
However, the longer-term picture is less encouraging. Compared with ten years ago, the number of rental properties available is still down by around a third. That structural shortage continues to place upward pressure on UK rental prices.
UK Finance data covering the year to October points to more positive signs. New buy-to-let mortgage activity was up 13% compared with the previous year, while remortgages increased by 23%. This suggests some landlords are re-entering the market, while others are choosing to hold on to existing properties.
Plan Insurance Brokers can accommodate your Property Owners & Landlord Insurance needs. Just fill in our short call back form, and our professional brokers will be in contact to arrange your insurance.
Competition cools, but not everywhere
Tenant competition has eased compared with the peak pandemic years. In 2025, there were an average of ten enquiries per available rental home. That is lower than 2024’s figure of fourteen, but still above the pre-pandemic average of six seen in 2019.
Demand remains uneven across the country. London averaged seven enquiries per property last year, while the North West and Scotland saw more than double that level at sixteen enquiries per home.
Buy-to-let mortgage rates offer some relief
Affordability for landlords has also improved. Rightmove’s buy-to-let mortgage tracker shows the average two-year fixed rate for a landlord with a 25% deposit fell to 4.84%, down from 5.51% a year earlier.
Lower rates may help support further investment in rental homes, which could gradually ease supply pressures if sustained.
What does 2026 look like?
Rightmove expects average advertised rents to rise by a further 2% during 2026. While the balance between supply and demand has improved significantly since the pandemic, the underlying shortage of rental homes has not gone away.
Rightmove property expert Colleen Babcock notes that the market feels more settled, with greater choice for tenants and less frantic competition than a few years ago. Even so, limited supply is likely to keep rents ticking upwards rather than falling back.
For tenants, the message is one of stability rather than relief. For landlords, realistic pricing and professional management remain key as the rental market continues to normalise.
