Key figures
The average rent for new lets in the UK is £1,287 as of April 2025 (published in June 2025).
Rents have risen 2.8% in the last year, the slowest rate of growth seen in 4 years.
April 2025 | January 2025 | October 2024 | |
Average rent (new lets only) | £1,287 | £1,279 | £1,278 |
Annual rental growth | +2.8% | +2.7% | +3.3% |
Recent boom in rental cost is over
The 4-year surge in UK rental prices has ended. Over the 12 months to April 2025, average rents for new tenancies rose by 2.8% - less than half the 6.4% growth rate seen a year earlier and the slowest pace since July 2021. The typical monthly rent now stands at £1,287, an increase of £35 over the past year.
The slowdown is a result of weaker demand and ongoing affordability pressures, rather than an increase in rental supply.
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Demand lower but competition remains
Although demand for rented homes is 16% lower over the last year, it remains more than 60% above pre-pandemic levels. Lower levels of migration for work and study is one factor having spiked higher over 2022-2023. The ONS has reported a 50% decline in net migration in 20242 but levels of migration remain above the long run average.
Stability in mortgage rates and improved access to mortgage finance for first-time-buyers, most of whom are renters, is also a factor behind the moderation in levels of demand for renting.
Changes to how banks assess affordability will make it easier for renters on higher incomes to access home ownership, easing demand at the upper end of the rental market.
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Supply rising off a low base, more growth needed
Rental supply has increased, with 17% more homes available than a year ago, as homes take slightly longer to rent. There are also signs of increased landlord purchasing activity as borrowing costs fall.
The reality is that rental supply remains 20% below pre-pandemic levels. While the pace of rent increases has slowed, renters still face strong competition for rented homes, especially those on lower incomes with little hope of being able to buy a home.
Slowdown in rental inflation across the country
Rental inflation has slowed across all regions and countries of the UK. Current annual increases range from 1.1% in Yorkshire and the Humber to 5.3% in the North East.
In Scotland, rental inflation has slowed sharply from 9.1% a year ago to 2.4% now. The removal of the limit on how much rents can increase within a tenancy means less pressure on landlords and agents to secure the highest rent possible on day one of a new tenancy. Removing this form of rental control has reduced rental inflation in Scotland alongside underlying affordability pressures.
In Yorkshire and the Humber, rental growth has also weakened, particularly in university cities like Sheffield (1.9%), Bradford (1.4%), and Leeds, where rents have fallen by 1.5% compared to last year.
At a more local level, rents continue to rise quickly in affordable areas, often adjacent to large cities e.g. Wigan (8.8%), Carlisle (8.8%), Motherwell (8.3%), Chester (8.2%), Blackburn (8.0%).
In addition to Leeds, there are other pockets with falling rents. These include North West London (-0.2%), West Central London (-0.6%) and Dundee in Scotland (-2.1%).
The 2022-2023 rental boom and recent slowdown
Rental inflation has returned to pre-pandemic levels with a marked slowdown over the last 12 months. UK cities registered some of the fastest increases in rents over 2022 and 2023, led by London and other large regional cities. Rental inflation accelerated across the rest of the country but to a lesser degree.
Cities are now leading the slowdown in rental inflation as new 'Build to Rent' developments expand supply and affordability pressures limit rental growth alongside improved access to mortgage finance.
Rents have outpaced capital values
Market conditions in the sales and rental markets have diverged in recent years, although rents and house prices have registered similar growth over the last decade. Average UK rents are 21% higher over the last 3 years compared to just 4% for house prices.
Higher mortgage rates since 2022 reduced buying power in the sales market, reducing demand from home buyers and resulting in house price falls over 2023. Home buyers were locked out of the sales market, boosting demand for rented homes, compounded by high levels of migration which pushed rents higher.
The average monthly rent has increased by £219 over the last 3 years. This is broadly the same as the increase in average mortgage repayments. The average annual UK rent has increased by £2,650 over the last 3 years from £12,800 to £15,450 today.
Rental market outlook
The rental market remains on track for rental inflation of 3-4% over 2025. Rents will keep increasing at an above-average rate in more affordable areas close to large cities. Less restrictive mortgage lending will help some higher-income renters leave the rental market to buy homes. This will mean slower rental growth in the higher rental price brackets, particularly in large cities.
Despite improved conditions in the mortgage market, home ownership remains out of reach for a large proportion of households on lower to middle incomes with small deposits. This is a large and important group of private renters, who still face strong competition for rented property.
Those on lower incomes tend to be limited in their ability to move home, which risks triggering higher rental costs. Policy makers need to prioritise measures to grow the supply of affordable rented homes to boost choice for lower income renters.
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Our Rental Market Index is a repeat transaction index, based on asking rents and adjusted to reflect achieved rents. The index is designed to accurately track the change in rental pricing for UK housing.