Rent growth slows as house prices continue to rise

Private rents across the UK rose by 5.5% in the year to September, reaching an average of £1,354 per month, the Office for National Statistics reveals.

Its latest Price Index of Private Rents shows that while rents rose sharply, the rate of growth has eased from 5.7% recorded in August.

England saw average monthly rents climb to £1,410, also a 5.5% annual increase.

In Wales, rents rose by 7.1% to £815, while Scotland recorded a 3.4% rise to £1,004.

Northern Ireland saw the same 7.1% annual rise, bringing the average to £865 in the 12 months to July 2025.

Within England, the sharpest rent rise was seen in the North East, where rents surged by 9.1% over the year.

Yorkshire and the Humber experienced the smallest annual growth, at 3.8%.

UK house prices rise

Meanwhile, the ONS reports that average house prices grew by 3% to £273,000 in the year to August, though the annual growth rate fell from 3.2% the previous month.

In England, the average home now costs £296,000, marking a £9,000 (2.9%) annual rise, slightly lower than July’s 3.1% figure.

In Wales, prices climbed 2% to £211,000, while in Scotland, values rose by 4% to £194,000, an unchanged pace from July.

Northern Ireland recorded the strongest growth, with prices up 5.5% to £185,000 in Quarter 2 compared with the same period last year.

Property sector reaction on rent rises

Nathan Emerson, the chief executive of Propertymark, said: “With the average income needed to rent a home across the UK now reaching £45,420 and £1,514 being the typical rental price, it is clear that there are challenges which need addressing, in terms of simply not having enough supply of rental properties available to meet current demand levels.

“We are about to witness some of the biggest evolutions in over thirty years within the rental sector, with the Renters’ Rights Bill across England and the Housing (Scotland) Bill.

“Both will make fundamental changes to how landlords operate and are aimed at strengthening consumer rights concerning standards.

“Across the forthcoming decade, it is essential that all eyes are turned to encouraging long-term investment in the rental sector to keep up with increased demand and population growth.”

Emma Cox, the managing director of real estate at Shawbrook, said: “House prices edged upwards in August by 3% YoY driven by the usual summer uptick, a more competitive mortgage market and an increase in available stock.

“While conditions remain challenging for professional landlords, ongoing affordability pressures continue to steer many prospective buyers towards the rental market.

“This is creating opportunities for landlords to meet resilient demand and expand their portfolios.”

Alex Upton, the managing director of specialist mortgages at Hampshire Trust Bank, said: “Zoopla has suggested that current conditions in the rental market are the softest seen in five years, yet rents are still edging upwards.

“That says everything about the underlying strength of tenant demand and the structural imbalance between supply and availability.

“All eyes are now on the upcoming Budget. We are still well short of the rental stock needed, and without clear, practical measures to boost supply, that imbalance will keep rents under pressure.

“The market doesn’t need short-term signals or headline policies; it needs delivery.”

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “The nervousness in the sales market is apparent in lettings too but it is not just the Budget and the potential impact of financial changes but the imminent arrival of the Renters’ Rights Bill which is prompting more than a stir.

“Tenants are bearing the brunt as landlords are selling up whereas those remaining are becoming more strict about referencing and guarantors in anticipation of finding it more difficult to remove problematic tenants when the new set of rules is in place.

“On the other hand, tenants are still concerned about affordability, which is evidenced in the higher-than-average rent increases noticed in areas away from the more expensive London and the south east.”