Rents across Great Britain fell over the course of 2025 for the first time since records began according to the latest Hamptons Lettings Index.
Newly agreed rents dropped by 0.7% over the year, marking the first full-year decline since the index was launched in 2011. By the end of 2025, the average rent for a new let stood at £1,371 a month, £10 lower than a year earlier.
London saw the sharpest correction, with new-let rents down 2.7% over the year, equivalent to £63 a month, taking average rents back to mid-2023 levels.
Five of the 11 regions tracked by Hamptons recorded annual declines.
By December, rents were also falling in the South East, East Midlands, Yorkshire & Humber and Wales, meaning five of the 11 regions tracked by Hamptons recorded annual declines.
Other regions are close to following suit. Rents in the East of England, South West and Scotland rose by less than 1% in 2025, suggesting further regional falls could emerge in early 2026.
IMPROVING SUPPLY
The slowdown has coincided with improving supply. The number of homes available to rent ended the year 6% higher than in December 2024 and just 8% below 2019 levels, compared with a 52% shortfall during the post-pandemic rental boom.
Hamptons said the increase reflected weaker tenant demand rather than a rise in new landlord purchases.
Landlord activity continued to slide, with investors accounting for just 10.9% of purchases in 2025, the lowest share since records began and the first full year in which the higher 5% stamp duty surcharge applied.
The North East remained the most investor-heavy region, although falling interest rates encouraged slightly stronger investor demand in parts of the South.
Meanwhile, renewal rents continued to rise, up 3.3% across Great Britain, narrowing the gap between new lets and renewals to its smallest level since mid-2021.
FIRST-TIME BUYERS
Aneisha Beveridge, head of research at Hamptons, said: “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, 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 added: “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 went on to say: “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.”
