UK rents climb as house price growth cools – ONS

Rents continue to rise across the UK following the Renters’ Rights Act, while house price growth slows, the Office for National Statistics (ONS) reports.

Private rents increased by 3.7% in the 12 months to July 2026, reaching an average of £1,393. This was up from an annual growth rate of 3.3% in the 12 months to June 2026.

Industry experts say the rise in rents is an unintended consequence of the Renters’ Rights Act.

Rents are being pushed higher

Tom Bill, head of UK residential research at Knight Frank, said: “Rents are being pushed higher as the unintended consequences of the Renters’ Rights Act play out. Some landlords have left the sector, which has reduced supply, while others have increased asking rents to reflect the additional financial risks they face.

“The consequences may be unintended, but they were not unexpected, and a policy designed to tip the balance of power towards tenants is adding to the financial pressures they already endure.”

According to the ONS rental price index, average rents increased to £1,451 (3.8%) in England, £843 (4.5%) in Wales and £1,016 (1.7%) in Scotland in the 12 months to July 2026.

Landlords selling up

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “More timely than the sales figures, the rental data confirms what we have seen on the ground: demand remains strong, particularly for higher-end houses among those returning from holiday and seeking accommodation before the new school term.

“Rents have held firm, invariably supported by a shortage of supply. Some landlords are still selling due to the Renters’ Rights Act and tax concerns, while those staying are insisting on better quality references, just in case possession is required.

“We have also noticed more activity prompted by some tenants taking advantage of the new rules rather than remaining in a fixed-term arrangement.”

Rental inflation has slowed

The ONS reports,in England, private rent annual inflation was highest in the North East (6.3%) and lowest in the South East (2.9%) in the 12 months to July 2026.

Nathan Emerson, CEO at Propertymark, explained that rental inflation has fallen.

He said: “Although rental prices continue to increase, the overall rate of rental inflation has slowed over the past 12 months. However, with an average of seven people registering their interest in each available property at many letting agency branches, there remains intense pressure on the supply of suitable rental homes.

“Across all nations, there is a continued need for substantial long-term investment in housing to keep pace with real-world demand, particularly as the population continues to grow. However, for rental stock levels to increase, many factors must work in harmony to help deliver sustainable new homes in the regions where they are needed and at the right time.”

Higher mortgage rates

In the sales market, average UK house prices increased by 2.0% to £272,000 in the 12 months to June 2026. This annual growth rate was down from 3.0% in the 12 months to May 2026.

UK house price annual inflation slowed sharply in June 2026, as price growth was weaker than it was last year in the months following the April 2025 Stamp Duty Land Tax changes in England and Northern Ireland.

Richard Donnell, executive director of research at Zoopla, explained that higher mortgage rates were to blame for the slowdown in house price growth.

He said: “Housing sales market activity has been hit hard over the summer by higher mortgage rates which have hit buying power and slowed price inflation. Movers have taken stock of the political and economic backdrop.

“However, people can’t put decisions on hold indefinitely and we expect a rebound in activity in September and October with some early signs of a return of buyers. Buyers have a huge choice of homes for sale and aren’t in a rush so sellers who really want to move need to price realistically to attract buyers and secure a sale.

“Higher borrowing costs have hit first-time buyers harder than homeowners and this means people are renting for longer, which will support demand for rented homes and steady growth in rents, particularly as we come into the busy time of year for the rental market as students and those starting new jobs compete for a still scarce supply of rented homes.”

Tighter affordability

Nick Leeming, chairman of national estate agency Jackson-Stops, said: “The figures point to a market holding broadly steady. Buyers are still moving, but tighter affordability means price, quality and value are determining which homes secure attention. This is a market that is increasingly price-sensitive.

“June brought the start of a political transition, with Andy Burnham emerging as the likely next Prime Minister and prompting renewed debate about the incoming Government’s approach to property taxation. While Burnham has since ruled out changes to Stamp Duty at the next Budget, the tax remains a significant barrier to movement. Our own research found that removing these costs could bring more than 300,000 owner-occupied homes onto the market across England within less than a year.

“Buyers now have more choice, more time and greater negotiating power. Sellers can still attract committed purchasers, but they must engage with the market as it is, not as they might wish it to be.”