UK private rents rose at a slightly faster pace in August while annual house price growth eased in July, according to the latest official figures.

The Office for National Statistics said the average UK monthly private rent reached £1,400 in August 2026, an increase of 3.8% compared with a year earlier. That was marginally higher than the 3.7% annual growth recorded in July.

Average rents in England increased by 4.0% to £1,459, while Wales recorded a 4.3% rise to £846. In Scotland, rents were up 1.1% at £1,013.

The latest available figures for Northern Ireland, covering the 12 months to June 2026, showed average rents rising by 1.6% to £874.

Within England, the strongest annual rental growth was recorded in the North East and North West, where rents increased by 5.8%. The South East recorded the lowest rate of inflation at 3.0%.

Meanwhile, the average UK house price stood at £273,000 in July, up 1.4% year on year. The annual growth rate eased from 1.5% in June.

Average house prices rose by 1.1% to £293,000 in England, by 2.6% to £215,000 in Wales and by 2.3% to £196,000 in Scotland.

MORTGAGE MARKET PRESSURES

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The higher cost of living is squeezing household affordability, and impacting what those who need to move are prepared to spend.

“Inflation rising again to 3.1%, considerably above the Bank of England’s 2% target, is unwelcome news as far as interest rates are concerned.

“However, it’s not surprising given ongoing tensions in the Middle East fuelling inflationary pressures, and borrowers should prepare for higher mortgage costs.

“Although the Bank of England held base rate again at its last meeting, volatile Swap rates, which underpin mortgage pricing, have led a number of the bigger lenders increasing their mortgage pricing in the past week.

“We expect other lenders to follow suit, even if the Bank holds interest rates again at tomorrow’s meeting.

“Those who need a mortgage in coming months may wish to secure a rate now, with the view to switching to a cheaper one when you come to take it out, should a lower rate be available at that time.”

Chris Storey, chief commercial officer at Atom bank, said: “This data marks a turning point in house point growth. Given the latest Lloyds house price index – which is more up to date – has reported the first annual house price fall in three years, we are likely to see further falls play out in next month’s ONS data.

“Against the current backdrop, the market has been driven by those who feel moving is a necessity, rather than by aspirational buyers.

“Having risen to 3.1% today, inflation is forecast to increase in the months ahead. The expectation is that the Bank of England will increase Base Rate, which will further dampen enthusiasm among buyers.

“We would ordinarily expect activity to pick up now following the summer holidays and as buyers attempt to complete deals before Christmas, but don’t be surprised if the market remains more subdued than usual.”

LANDLORD COSTS

Alex Upton, managing director, specialist mortgages & bridging finance at Hampshire Trust Bank, said: “Continued rental growth is masking some of the pressures landlords are dealing with at the moment.

“These figures follow HMRC data showing property rental income has reached a five-year high, which on the face of it should make the sector more attractive to quality investors. But the same data shows the costs associated with being a landlord have risen by 11% over the last year and by 56% over the last five years.

“Higher rents do not automatically mean stronger returns, and that is shaping the conversations we are having with landlords. Many are reassessing where they deploy capital and looking more closely at the role individual properties play within a wider portfolio.

“That is widening the gap between landlords who are actively professionalising and restructuring their portfolios, and those deciding the economics no longer justify remaining in the sector.

“For those continuing to invest, it is increasingly about owning the right properties rather than simply owning more of them.

“We are seeing particular interest in HMOs and other specialist property types where investors believe there is an opportunity to build more resilient income over the longer term.

“Build to rent is helping add much-needed stock in some parts of the market, but it cannot replace the breadth of supply provided by individual and professional landlords. We need a diverse rental sector if we are going to meet tenant demand.

“That means recognising that rental supply depends not just on tenant demand, but on whether landlords can see a sustainable return after costs.”