Average rents across Britain rose by just over 2% in 2025 and marking the weakest annual increase for several years as improving supply and softer demand helped bring greater balance back to the lettings market, latest data from Rightmove reveals.
The average advertised rent outside London fell by 1.1% (£15) in the final quarter of the year, taking the typical monthly rent to £1,370.
It was only the second quarterly fall in rents seen over the past five years. Despite this late dip, average rents outside the capital finished 2025 up 2.2% (£29) compared with 2024 – the lowest annual growth rate recorded at the end of a year since 2018.
London followed a similar trend. Average advertised rents in the capital fell by 0.7% (£20) in Q4, leaving the average rent at £2,716 per month. Over the course of 2025, rents in London rose by just 0.8%, the weakest annual growth since 2020, when the pandemic triggered a sharp correction in the capital’s rental market.
AROUND THE REGIONS
Regional performance varied. Rents increased the least in the North East (+0.4%) and London (+0.8%), while the strongest growth was seen in the North West (+3.6%) and Yorkshire & The Humber (+3.1%).
Signs of a more balanced market are emerging. The total number of homes available to rent is now 9% higher than a year ago, although this still represents a 33% drop compared with a decade ago, underlining the structural shortage of rental homes.
There are also early indications of renewed landlord activity. UK Finance data shows that new buy-to-let mortgages taken out to purchase rental homes were up 13% in the year to October compared with the same period in 2024, while buy-to-let remortgages increased by 23%, suggesting both new investment and landlords choosing to retain existing properties.
TENANTS
Tenant competition has eased compared with recent years. In 2025, there were an average of 10 enquiries per available rental home, down from fourteen in 2024, though still above the pre-pandemic average of six recorded in 2019.
Regional pressures remain uneven, with London averaging seven enquiries per property, compared with sixteen in the North West and Scotland.
Falling buy-to-let mortgage rates are also improving affordability for landlords. Rightmove’s daily tracker shows that the average 2-year buy-to-let mortgage rate for a landlord with a 25% deposit has fallen to 4.84%, from 5.51% a year earlier.
Looking ahead, Rightmove expects average advertised rents to rise by a further 2% during 2026.
While supply and demand are now in better balance than during the pandemic years, the ongoing shortage of rental homes is expected to keep upward pressure on rents.
BALANCED MARKET
Colleen Babcock (main picture, inset), Rightmove’s Property Expert, says: “There is still a long-term shortage of available rental homes, but it looks like landlords are taking advantage of cheaper available mortgage rates, and more available homes will benefit tenants.
“Existing tenants or those looking to rent their own home for the first time are likely to experience a much more settled and balanced market than a few years ago, when the competition to secure a home was frenetic.
“There is much greater availability of homes, and fewer tenants to compete with now, which should hopefully make the experience more positive for renters.”
“Moderation should not be mistaken for recovery.”
Nathan Emerson, CEO of Propertymark, says: “These figures show the rental market is gradually moving away from the volatility of recent years and towards a more balanced position.
“Slower annual rent growth and modest quarterly falls in some areas will offer some relief to tenants after a prolonged period of sharp increases.
“However, moderation should not be mistaken for recovery. Rental supply remains well below the pace needed across the long-term to stay in keeping with demand. While competition has eased, demand is still higher than pre-pandemic norms in many parts of the country. This imbalance continues to place upward pressure on rents.
“Improving buy-to-let mortgage affordability and working objectively to renew landlord confidence are encouraging signs, but long-term policy stability will be essential if this is to translate into a sustained increase in supply. Without this, rents may rise more slowly but are unlikely to fall.
“Moving further into 2026, a steady increase in rents reflects a market that is calmer, but still constrained, underlining the need for continued investment in the private rented sector.”
VALUE FOR MONEY
Sarah Leslie, Lettings Manager at Jackson-Stops Sevenoaks, says: “Tenants are increasingly focused on value for money. Pricing accuracy is now critical to maintaining momentum.
“Homes that are realistically priced for current market conditions are continuing to let well, while those that are over-priced are taking longer to secure tenants.
“Despite this shift, supply constraints are still supporting rents. Overall rental supply remains well below long-term norms, which means rental growth is moderating rather than reversing.
“Tenant priorities are becoming clearer.”
“Tenant priorities are becoming clearer as working patterns continue to evolve. Demand is strongest for well-located homes that offer private outdoor space and good transport links, particularly as more employers encourage a return to office-based working.
“Rents are likely to continue rising at a measured pace, supported by limited supply and ongoing demand.
“In this environment, realistic pricing and professional management are key to achieving consistent, sustainable returns.”
WAITING FOR CLARITY
Christina Harris, Director, Cheffins says: “Rental prices have been growing at pace, however the slowdown in growth last year was partly caused by uncertainty in the lead up to the Budget and the release of the details of the Renters Rights Act.
“In general, most tenants were only moving if absolutely necessary, preferring to wait for clarity on both the Budget and new legislation.
“Rental growth had been exceptionally strong for some time, well ahead of inflation, so a period of moderation was inevitable.
“Towards the end of last year we also saw an increase in supply, but as wages had not kept pace with rental values, affordability became a key issue for many tenants.
“With tenants typically needing to earn around three times the cost of rent, average rents in cities such as Cambridge were simply out of reach for some.
“Supply remains far behind where it needs to be.”
“Supply remains far behind where it needs to be. The consistent shortage of good quality, well-presented rental properties will no doubt put upward pressure on rents in the coming months.
“People still need to move for work or schools, and as the shortage of availability continues, it is likely that prices will edge up over the next year.
“While many landlords were cautious in the lead up to the Renter’s Rights Act, in the main, rental properties continue to provide a good return on investment, better than what can be found in most savings accounts and we haven’t yet seen the exodus from the market from landlords which so many predicted.”
