Private rents are continuing to rise at nearly double the pace of house prices according to new official figures that highlight the intensifying affordability squeeze on households across the UK.
Average monthly rents climbed 5.5% in the year to September, reaching a record £1,354, the Office for National Statistics said.
Although the rate of growth has eased slightly from 5.7% a month earlier, rent inflation remains far above income growth and continues to outstrip wider consumer inflation.
England remains the most expensive part of the country for tenants, with average rents rising 5.5% to £1,410.
REGIONAL OUTLOOK
Wales and Northern Ireland saw the fastest increases – both up 7.1% – with the average tenancy now costing £815 in Wales and £865 in Northern Ireland. Scottish rents rose more slowly, up 3.4% to £1,004.
The regional picture in England shows widening divergence. The North East recorded the sharpest annual increase at 9.1 per cent, driven by strong demand and limited supply, while Yorkshire and The Humber saw the weakest rise at 3.8%.
Several major English cities continue to report double-digit rent growth, adding pressure on younger households and private renters already facing elevated living costs.
HOUSE PRICE GROWTH COOLING
While the rental market heats up, house price growth is cooling. The UK House Price Index shows average property values rising just 3% in the year to August, reaching £273,000 – a slight slowdown from the 3.2% annual rate recorded in July.
England remains the most expensive market, with house prices up 2.9% to £296,000. Wales saw weaker growth at 2% to £211,000, while Scotland recorded the strongest rise at 4% to £194,000.
Rents are rising at almost twice the pace of house prices, reversing the pattern seen through much of the last decade and fuelling concerns about the long-term health of the private rented sector.
Analysts say the imbalance reflects constrained supply, higher landlord costs and a surge in demand from would-be buyers delayed by mortgage affordability challenges.
AFFORDABILITY PRESSURES
Richard Donnell, Executive Director of Research at Zoopla, says: “The last house price index data shows a slowdown in house price and rental inflation as affordability pressures bite.
“This slowdown is expected to continue into 2026. More first tome buyers and lower migration for work and study is easing the pressure on rents, with rents for new lets rising at their lowest level for four years.
“Pre-Budget jitters are hitting housing market activity at the start of the home buying process. Demand and sales agreed for homes priced over £500,000 are down by up to 9% on this time last year as buyers pause home buying decisions.”
EYES ON BUDGET
And he adds: “There are 350,000 homes where the sale has been agreed moving towards completion and some buyers of expensive homes will be nervous about possible changes to council tax for their new purchases.
“All eyes are now on next week’s Budget – if the housing market gets off lightly then we expect a rebound in demand and activity, but if the impact on consumer confidence is greater, then we could have a sluggish start to 2026.”
