UK rent and house prices see annual growth slow down – ONS

The pace of rent rises across the UK slowed down in August with average monthly rents growing by 5.7% to £1,348 in the 12 months to August, the Office for National Statistics (ONS) reveals.

Its latest Index of Private Rents shows that’s a slight slowdown from the 5.9% annual growth recorded in July.

In England, the average monthly rent was £1,403, up 5.8% on the year.

Tenants in Wales saw the steepest rise with the average rising by 7.8% to £811.

Scotland recorded a smaller 3.5% increase to £1,002 and in Northern Ireland, the average stood at £860 in June, representing annual growth of 7.2%.

Big rent rise in the North East

Within England, the North East experienced the sharpest rise, with rent inflation of 9.2%, while Yorkshire and the Humber saw the smallest change at 3.4%.

The ONS also highlights differences by property type and detached homes commanded the highest average rent at £1,536.

Flats and maisonettes were the lowest at £1,321.

Larger homes with four or more bedrooms averaged £2,010 a month, compared with £1,094 for one-bedroom properties.

UK’s house price growth slowed too

Meanwhile, the UK’s house prices grew by 2.8% to £270,000 in the year to July, a slowdown from 3.6% in June, the ONS says.

England’s average house price is £292,000, up 2.7%, and in Wales prices grew by 2% to £209,000, while Scotland’s prices rose 3.3% to £192,000.

Northern Ireland, measured on a quarterly basis, saw prices climb by 5.5% to £185,000 in the second quarter of 2025, an increase of £10,000 compared with the same period last year.

Reaction from the property sector

Tom Bill, the head of UK residential research at Knight Frank, said: “Rental values are coming down from the highs of the pandemic but are still elevated by historical standards.

“More landlords are exploring a sale due to changes including the looming Renters’ Rights Bill, which should push rents higher by reducing supply.

“Landlords have been the subject of a succession of tax and legal changes in recent years so it’s not difficult to imagine how they felt about the recent speculation the government could charge National Insurance on rental income.

“For some it could be a disincentive too far, while others could pass the cost on in other ways. Either way, it could end up hurting tenants.”

Russell Anderson, the commercial director of mortgages at Paragon Bank, said: “Historically, rent inflation has broadly correlated with wage inflation.

“The mismatch between the supply of and demand for privately rented homes in recent years has seen rents outpace wages, placing financial pressure on tenants.

“Positively, buy to let mortgages rates have lowered more recently, which should help improve affordability and, ultimately, supply.”

Richard Donnell, executive director at Zoopla, said: “Rents and house prices are slowing across the UK as housing demand cools and affordability pressures bite on what people can pay for rent and mortgages.

“This has big implications for home building where weaker demand is holding back investment in growing supply.

“The government needs to either support demand or remove the impediments to getting more home built.”

Nathan Emerson, the chief executive of Propertymark, said: “Now that politicians throughout the UK have returned from the summer recess, both the Scottish Parliament and Westminster will progress the Housing (Scotland) Bill and the Renters’ Rights Bill respectively.

“While both pieces of legislation represent fundamental changes to the rental markets of Scotland and England, the ongoing process of fine-tuning new legislation has the potential to create an environment of uncertainty for many landlords and renters.

“Demand is still outstripping supply considerably, which is why we cannot afford to see investors consider selling up and causing any further reduction in the supply of rental properties.

“With a population expected to exceed 70 million people by the end of the decade, there needs to be provision to enhance the flow of sustainable properties of all types and tenures into the system, backed up by data-driven insight and supporting infrastructure on a regional basis.”