The pace of UK rental growth slowed for the seventh consecutive month in July, even as house price inflation gathered momentum, according to the latest data from the Office for National Statistics (ONS).
Average private rents across the UK rose by 5.9% in the 12 months to July 2025, taking the typical monthly rent to £1,343.
That marks a decline from the 6.7% annual increase recorded in June and suggests the rental market is beginning to stabilise after a year of sustained pressure on tenants.
Rents in England climbed by 6.0% to an average of £1,398, while Wales saw a sharper 7.9% rise to £807. Scotland recorded a more modest 3.6% increase to £999. In Northern Ireland, where data are published on a different timetable, rents were up 7.4% to £855 in the 12 months to May.
FASTEST ANNUAL RENT GROWTH
Within England, the North East recorded the fastest annual rent growth at 8.9%, while Yorkshire and The Humber saw the lowest, at 3.5%.
In contrast to the softening rental trend, UK house prices rose more sharply in June. The average price increased by 3.7% over the year to £269,000, up from 2.7% in May. Prices grew by 3.3% to £291,000 in England, 2.6% to £210,000 in Wales, and 5.9% to £192,000 in Scotland.
The ONS attributed some of the variation in recent figures to a methodological update to the UK House Price Index, designed to reduce future revisions. The improvement, however, has led to larger-than-usual revisions in this month’s release, affecting data from February 2025 onwards.
Despite the moderation in rental inflation, average rent levels remain significantly above pre-pandemic norms, while the rebound in house price growth suggests that recent interest rate cuts may be starting to filter through to buyer sentiment.
SLOWING DEMAND
Richard Donnell, Executive Director of Research at Zoopla, says: “House price inflation is slowing, but strong demand from first time buyers is keeping this measure of price inflation higher than other measures.
“Budget uncertainty is leading to a slowdown in sales and demand which will drive a continued slowdown in house price inflation.
“The increase in first-time buyers activity is one reason rental inflation has slowed to the lowest level in almost three years, alongside a 20% increase in the number of homes for rent and growing affordability pressures on renters.”
UNCERTAINTIES AHEAD
Nathan Emerson, CEO of Propertymark, says: “Despite an economy that continues to throw challenges, especially to those on the housing ladder, it is positive to see people witness growth in their equity when looking at property.
“Consumers have battled a very unfavourable combination of high inflation and interest rates over the last few years, and there remain potential uncertainties ahead in many cases.
“Next month, we will see the Chancellor set down fiscal plans within the Autumn Budget, and there is widespread speculation that Stamp Duty across England and Northern Ireland may be scrapped and potentially replaced with an alternative.
“Depending on what is proposed and implemented, there is potential to create a much smoother-flowing property marketplace.
“However, it is important that any new system helps remove barriers to purchasing a property for those who aspire to.”
LONG-TERM RENTAL INVESTMENT
And responding to the latest on private rented prices, he adds: “With the average income needed to rent a home across the UK now reaching £45,420 and £1,514 being the typical rental price, it is clear that there are challenges which need addressing, in terms of simply not having enough supply of rental properties available to meet current demand levels.
“We are about to witness some of the biggest evolutions in over 30 years.”
“We are about to witness some of the biggest evolutions in over 30 years within the rental sector, with the Renters’ Rights Bill across England and the Housing (Scotland) Bill. Both will make fundamental changes to how landlords operate and are aimed at strengthening consumer rights concerning standards.
“Across the forthcoming decade, it is essential that all eyes are turned to encouraging long-term investment in the rental sector to keep up with increased demand and population growth.”
TENANTS ARE BEARING THE BRUNT
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “The nervousness in the sales market is apparent in lettings too but it is not just the Budget and the potential impact of financial changes but the imminent arrival of the Renters’ Rights Bill which is prompting more than a stir.
“Tenants are bearing the brunt as landlords are selling up whereas those remaining are becoming more strict about referencing and guarantors in anticipation of finding it more difficult to remove problematic tenants when the new set of rules is in place.
“On the other hand, tenants are still concerned about affordability, which is evidenced in the higher-than-average rent increases noticed in areas away from the more expensive London and the south east.”
