Annual rent increases slow to 7% and house prices rise – ONS

The average monthly private rent in the UK grew by 7% in the year to May, reaching £1,339, according to the Office for National Statistics (ONS).

While this marks a significant rise, the annual growth rate has eased from 7.4% in the 12 months to April, reflecting a gradual slowdown in rental inflation.

Also, ONS reveals that house prices rose by 3.5% in the year to April.

Rent rises by country

The ONS reveals that in England, rents rose by 7.1% to an average of £1,394, down from 7.5% in April, marking the sixth consecutive month of slowing annual growth.

The North East saw the steepest increase at 9.7%, while Yorkshire and the Humber recorded the lowest at 3.7%.

Wales experienced an 8.5% hike, with average rents reaching £799, a slight decline from the 8.7% rise in April and well below the peak of 9.9% in November 2023.

Scotland’s rents grew by 4.5% to £999, the smallest annual increase in three years, down from 5.1% in April and much lower than the 11.7% high in August 2023.

Northern Ireland’s rents in the year to March, rose by 7.7% to £848, a marginal drop from 7.8% in February and below the 9.9% peak in April 2024.

House prices also grow

House prices also saw movement, with the UK average rising 3.5% to £265,000 in the year to April 2025, a slowdown from 7% in March.

That price rise was influenced by a price dip following Stamp Duty Land Tax changes on 1 April, which increased taxes for properties above £125,000 in England and Northern Ireland, prompting a spike in March transactions.

The ONS says that England’s house prices grew 3% to £286,000, Wales by 5.3% to £210,000, Scotland by 5.8% to £191,000 and Northern Ireland by 9.5% to £185,000 in the first quarter of 2025.

Property sector reaction

Alex Upton, the managing director of specialist mortgages at Hampshire Trust Bank, said: “Rents continue to rise, and it is no surprise.

“Supply is still struggling to meet demand, and competition for well-located rental properties remains high.

“That pressure is unlikely to ease in the near term.

“New housing delivery may help, but even if government targets are met, it will take time for that stock to reach and influence the rental market.”

Nathan Emerson, Propertymark‘s chief executive, said: “The private rental sector is facing much evolution across nearly all corners of the UK currently.

“We have the recent publication of the Housing (Scotland) Bill progressing through the final stages of the Scottish Parliament, and the Renters’ Rights Bill in England is also approaching its final stages in Westminster.

“These pieces of legislation will bring seismic change for those who rent and will represent some of the biggest differences within the rental market in decades.

“There has been much discussion and immense concern for many landlords, with considerable numbers contemplating selling their properties, with the potential to lessen supply even further.”

Louisa Sedgwick, the managing Director of mortgages at Paragon Bank, said: “Tenants will undoubtably welcome the moderation of average monthly rents, but this remains elevated following the record high seen last quarter.

“The supply of privately rented homes continues to be below the levels seen before the pandemic and substantially outstripped by demand, a dynamic that will see rents continue to rise above the rate of inflation.

“The need for privately rented homes will be sustained by predicted population increases and changes to household formation, with more people choosing to live alone or remain in the sector for longer. For this reason, investment in stock must be encouraged and facilitated by favourable economic conditions and balanced regulation.”

Richard Harrison, the head of mortgages at Atom bank, said: “While house prices continue to grow, prospects for buyers may be improving.

Rightmove has reported the number of homes for sale has hit its highest level in a decade, and that competition among vendors is leading to lower asking prices.

“However, it’s also leading to increased activity levels – Rightmove believes that May was the strongest month for agreed sales since March 2022.”