Rents across Great Britain fell over the course of 2025 for the first time since records began and marking a turning point after several years of rapid growth, according to Hamptons.
Newly agreed rents dipped by 0.7% over the year, the first full-year decline since the Hamptons Lettings Index was launched in 2011. The average tenant moving into a new home paid £1,371 a month by the end of the year, £10 less than a year earlier.
London led the downturn, with newly agreed rents falling 2.7% over 2025, equivalent to £63 a month, taking average rents back to mid-2023 levels.
By December, rents were also falling in the South East, East Midlands, Yorkshire and the Humber and Wales, meaning five of the 11 regions tracked by Hamptons recorded annual declines.
NEGATIVE TERRITORY
Several other regions came close to tipping into negative territory. Rents in the East of England, South West and Scotland rose by less than 1% over the year, suggesting further falls could emerge in early 2026.
The cooling rental market has coincided with a modest recovery in supply. The number of homes available to rent ended 2025 6% higher than a year earlier and only 8% below pre-pandemic levels, compared with a 52% shortfall during the post-Covid rental boom.
Hamptons says the increase reflects softer demand rather than a surge in new landlord purchases.
DECLINING LANDLORD ACTIVITY
Landlord activity continued to decline, with just 10.9% of homes bought by investors in 2025 – the lowest share since records began and the first full year in which landlords paid the higher 5% stamp duty surcharge.
The North East remained the most investor-heavy market, while falling interest rates encouraged some renewed interest in parts of the South.
Renewal rents continued to rise, up 3.3% across Great Britain, narrowing the gap between new lets and existing contracts to its smallest level since mid-2021.
FIRST-TIME BUYERS
Aneisha Beveridge (main picture, inset), Head of Research at Hamptons, says: “On paper, 2025 looked like a good year for tenants. Rents on new lets ended 2025 lower than they started, and tenants had more choice than before.
“However, falling rents were driven more by strong first-time buyer numbers and wider economic weakness than by improved tenant affordability.
“Fewer tenants are taking their first step into the rental market.”
“Fewer tenants are taking their first step into the rental market, with many staying at home longer and being reluctant to commit to the cost of renting a place of their own.”
RENTERS’ RIGHTS ACT
She adds: “2026 brings the implementation of the Renters’ Rights Act in May, which bans offers above the asking rent.
“This means that agreed rents and advertised rents may start to rise at different rates. The block on landlords accepting a price above what they asked for is likely to push up advertised rents, with more tenants making offers below the higher asking price instead.
“However, at least initially, it is unlikely to impact the values actually being achieved.”
MARKET SQUEEZE
And she says: “But towards the back end of the year, it’s possible the implementation of the Renters’ Rights Act may start proving inflationary for agreed rents.
“If landlords start to find the procedural and legal machinery underpinning the new rules lacking, it is likely to slowly squeeze rental homes out of the market.
“From a supply perspective, the lack of appetite means the share of homes bought by investors could fall below 2025’s already low levels.”
