Rents rise as house prices slow – ONS

Average private rents across the UK rose by 3.3% to £1,388 a month in the year to June, while house price growth in England slowed sharply, the Office for National Statistics (ONS) reports.

The annual increase in rent was unchanged from May, with tenants in England paying an average of £1,446 a month, up 3.4%.

Wales recorded the fastest increase with average rent rising by 4.9% to £843. Rent in Scotland increased by 1.3% to £1,012.

In Northern Ireland, the average reached £877 in the 12 months to April, an annual increase of 2.9%.

The North East recorded England’s highest rent inflation at 6.3%, while London had the lowest at 2.2%.

Tenant demand is high

Nathan Emerson, the chief executive of Propertymark, said demand remained well ahead of the number of homes available through its member agents.

He said: “The rental sector continues to face intense pressure, with around seven people approaching Propertymark member agents for every available property they have on offer.

“Ultimately, we need to see a significant increase in the number of rental properties entering the lettings market to keep pace with growing demand and help ease overall costs for many renters.”

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said rent levels were still being supported by a shortage of supply.

He said: “Solid rental levels continue to be supported by lack of supply prompted in part by landlords selling up – albeit in smaller numbers – due to tax and regulatory concerns.

“In our offices, we have noticed a fair number of existing landlords playing a wait-and-see game to see whether rents increase sufficiently to justify remaining in the sector.”

Landlords reconsider investments

Alex Upton, the managing director of specialist mortgages at Hampshire Trust Bank, said the slower pace of rent growth was changing how landlords approached investment.

He said: “That’s creating a more balanced market, which tends to suit landlords taking a longer-term view rather than relying on rapid rental inflation.

“The Renters’ Rights Act is continuing to shape how landlords think about their portfolios, with smaller landlords increasingly considering their options while more professional investors continue to look for opportunities to strengthen and refine their portfolios.”

House prices rise

The ONS’ house price data shows that the average property in England was worth £292,000 in May, up £6,000 or 2.3% from a year earlier.

Annual growth had stood at 4% in April as prices rose by only 0.1% in May 2026 compared with a 1.8% monthly increase a year earlier following changes to Stamp Duty Land Tax.

The average price in Wales rose by 4.2% to £215,000, while Scotland recorded a 4.4% increase to £196,000.

Northern Ireland’s average house price reached £198,000 in the first quarter of 2026, an increase of 7.4% or £14,000 from a year earlier.

Regional house prices

Ben Nichols, the chief executive of RAW Capital Partners, highlighted the differences between regional housing markets.

He said: “Average property prices in London have fallen by 3.7% since May 2025, while those in the North East have jumped 5.9% in that time.

“In our work with brokers and borrowers, it’s important that lenders recognise these market trends.”

Richard Donnell, the executive director of research at Zoopla, said activity had weakened during the summer.

He said: “Zoopla’s very latest data shows 20% fewer buyer enquiries than a year ago and 7% fewer sales agreed.

“This comes as annual house price growth in the ONS index has already slowed to 2.7% in the 12 months to May.”

Jason Tebb, president of OnTheMarket, said: “Our own Property Sentiment Index shows that the gap between buyer and seller expectations is narrowing, with properties increasingly priced appropriately from the outset.

“This should help transactions progress more quickly and smoothly, which will help the overall functioning of the housing market.”