Average UK monthly private rents rose by 4.4% in the 12 months to November 2025, reaching £1,366, according to the latest Price Index of Private Rents.

While still elevated, annual growth was down from 5.0% in October, pointing to a gradual cooling after several years of sharp increases.

Across Great Britain, rents increased to £1,422 in England, up 4.4% year on year, £820 in Wales, up 6.1%, and £1,012 in Scotland, up 3.3%. In Northern Ireland, average rents rose by 6.4% to £871 in the 12 months to September 2025.

Regional data shows significant variation within England. Annual rent inflation was highest in the North East at 8.4%, while London recorded the weakest growth at 2.8% over the same period.

PRESSURE NOT EASING

Alex Upton, managing director, specialist mortgages and bridging finance at Hampshire Trust Bank, said: “While the pace of rental growth has slowed, 2025 still delivered significant increases, underlining how stretched the private rental sector remains. That pressure is not easing.

“The recent Budget has added to it, with the government’s own figures showing 2.4 million landlords will face higher taxes by the end of this Parliament. For some, that could be the point they call time on their portfolios.

“Regulatory change continues to build. From energy standards to tenancy reform, landlords are being asked to adapt at speed, often without clarity. The Renters’ Rights Act will be another major shift in how property is owned and managed, and we are already seeing investors respond.

“There is a clear move towards more complex asset types such as HMOs, semi-commercial units and mixed-use portfolios. That shift is not just about chasing yield. For many, it is about finding a way to stay in a sector that is getting harder to navigate. Brokers are seeing it play out on the ground every day.

“Improving standards is the right ambition, but there is a line between raising the bar and pulling the rug. If pressure continues to build without recognition of the consequences, we risk weakening the very market people rely on. That is not a policy warning. It is already happening.”

Alongside rental data, the UK House Price Index shows house price inflation continuing to moderate. Average UK house prices rose by 1.7% in the 12 months to October 2025, to £270,000, down from annual growth of 2.0% recorded in September.

Average prices increased to £292,000 in England, up 1.4% year on year, £211,000 in Wales, up 1.5%, and £192,000 in Scotland, up 3.3% over the same period.

WEAKER DEMAND

Richard Donnell, executive director of Zoopla, said: “Slower house price inflation reflects higher stamp duty costs for home buyers and the impact of Budget uncertainty on the market with annual price falls across London.

“Rental inflation continues to slow as a result of weaker demand and 20% more homes available to rent. Lower migration and easier conditions for first-time buyers is why demand for rented homes is at a six-year low.”

YEAR OF STEADY GROWTH

Chris Storey, chief commercial officer at Atom bank, said: “This latest increase rounds off a year of steady growth for house prices. Despite the uncertainty around the stamp duty deadline earlier this year, and then the much-trailed Autumn Budget, the value of our homes has continued to rise.

“It’s striking that while house prices are hitting new heights, affordability may actually be improving. Recent analysis from Halifax suggested that when comparing property prices to income, affordability is at its strongest since 2015. Given the expectations of further rate cuts to come, and the competitive lending landscape, brokers should gear up for a positive start to next year as would-be buyers pursue purchases.

“If rates do drop as expected, then we should expect to see further house price growth next year too, as the imbalance between supply and demand is not going anywhere in the short term.

“The challenge is for lenders to recognise the areas in the market where borrowers need the most support, and deliver the products and criteria which make home ownership achievable and affordable.

“Whether that’s borrowers with small deposits, the self-employed, or those with imperfect credit, the lending market must ensure we don’t end up in a situation where subsets of borrowers find it unnecessarily difficult to access mortgages.”