Average advertised rents outside London have broken through £1,400 a month for the first time, although the pace of rental growth has slowed significantly from its post-pandemic highs.
Rightmove says the average asking rent has reached a record £1,418 per calendar month, following a 1.5% quarterly increase.
Annual growth now stands at 2.4%, however, compared with increases of around 10% seen between 2021 and 2023.
The national market has also become more balanced, with the number of available rental properties 2% lower than a year ago while tenant demand has fallen by a similar amount.
LONDON SQUEEZE
Conditions are tighter in London, where the average advertised rent has reached a record £2,825 per month and annual growth has accelerated to 3.2%.
Available rental stock in the capital is 9% lower than a year ago and the number of newly listed homes has fallen 7%, while tenant demand has increased 6%.
London is now the third-fastest region for annual rental growth, despite lower-priced parts of Great Britain generally recording stronger increases.
Colleen Babcock, Property Expert at Rightmove, says: “Average rents have reached another new record and have now surpassed £1,400 per month outside London for the first time.
“However, beneath the headline figure, rental growth has continued to settle compared with the exceptionally fast pace we saw a few years ago.
“Supply remains constrained, which is continuing to put upward pressure on rents, but demand is also more measured. That has helped to create a more balanced market overall, even though affordability remains a challenge for many renters.”
LANDLORD INVESTMENT
Rightmove’s figures also point to continued caution among landlords considering adding properties to their portfolios.
Around 13% of homes currently for sale were previously available to rent, broadly unchanged during 2026 and only slightly above the 12% recorded last year.
However, the proportion of rental properties that were previously listed for sale has fallen from 17% to 15%, which Rightmove says is an indicator of reduced landlord investment.
Higher borrowing costs are adding to the pressure. The average two-year fixed buy-to-let mortgage rate now stands at around 5.34%, compared with 4.16% before the war in Iran began.
Matt Smith, Rightmove’s Mortgage Expert, says: “One of the biggest challenges for many landlords at the moment is managing the properties they already own when the time to remortgage comes around.
“New buy-to-let investment has been relatively subdued for some time, and some landlords are still reaching the end of much cheaper fixed-rate deals taken out when borrowing costs were lower.
“For those landlords, moving onto a higher mortgage rate can have a significant impact on monthly costs and rental yields.
“With rent reviews now generally limited to once a year, landlords need to plan carefully alongside refinancing. Where the numbers no longer add up, higher mortgage costs could ultimately influence decisions about whether to remortgage or sell a rental property.”
TENANT COMPETITION
The renewed pressure in London is also being felt by letting agents.
Kesha Foss-Smith, Head of Lettings at John D Wood & Co, says: “London’s rental market is showing renewed pressure, with rising tenant demand and fewer available properties increasing competition for the best homes.
“Higher mortgage costs are also keeping some would-be buyers in the rental sector for longer, adding to demand, particularly for smaller properties.
“Despite tighter supply, value for money remains critical. Tenants are increasingly discerning, especially at the upper end of the market, making realistic pricing and high-quality presentation essential.
“Looking ahead, maintaining a healthy supply of rental homes will be key to easing competition and supporting long-term market stability.”
Richard Antrobus, Director at VitalSpace, says: “The rental market in South Manchester remains highly competitive, with demand continuing to outstrip the supply of quality homes.
“While rental growth has become more measured and tenants are increasingly price conscious, well-presented and realistically priced properties continue to attract strong interest.
“Higher mortgage costs and growing regulatory pressures are also making some landlords more cautious about expanding their portfolios, further limiting the supply of homes available to rent.”
Kim Lidbury, President of ARLA Propertymark (Association of Residential Letting Agents), comments:
“The latest figures highlight why the rental market needs to be judged on more than the rate at which rents are rising. Although rental growth has moderated, advertised rents remain at record levels, and the availability of suitable homes continues to be a major concern for tenants.
“The cost and complexity of providing rental housing remain important considerations for landlords. Financing costs, taxation and regulatory requirements all influence decisions about whether to invest in, retain or sell rental property.
“These pressures can have wider implications.”
“These pressures can have wider implications for the availability and choice of homes for tenants.
“Letting agents also have an important role in helping landlords meet their responsibilities, maintain property standards and provide a professional service to tenants. A well-functioning private rented sector depends on responsible landlords being able to operate sustainably, alongside effective protections for renters.
“Ultimately, the priority is to ensure there are enough good-quality homes available to rent, at a range of price points, while maintaining a rental sector that works for both landlords and tenants. A slowdown in rental growth is welcome, but it will not, on its own, resolve the affordability challenges facing renters.”
