UK rents rise 3.5% as house price growth slows

Private rents across the UK continued to climb at the start of the year, though the pace of growth has eased.

The latest Office for National Statistics data show average monthly private rents rose 3.5% to £1,367 in the 12 months to January 2026.

Last month, the annual increase was 4%.

In England, average rents rose by 3% and reached £1,423, while Wales posted the strongest increase of 5.8% to £826.

Scotland saw a more modest rise of 2.6%, taking the average to £1,021.

Northern Ireland’s rental market recorded a 5.6% increase, pushing average monthly rents to £875.

In England, the North East recorded the fastest annual rental inflation at 8.0%, as London’s rents delivered the slowest growth of 1.1%.

UK house prices edge higher

Alongside the slowing rate of rent rises, house price growth also showed signs of moderating.

Average UK house prices increased 2.4% to £270,000 in the 12 months to December 2025.

That’s down from the 2.8% annual growth the previous month.

London’s house prices fell by 1.2% over the year.

England’s average property value reached £292,000, up 1.7% year on year, equivalent to a £5,000 increase.

However, that’s a softer rise than the 2.5% growth recorded to November.

Wales posted stronger momentum as prices climbed 5% annually to £215,000, a £10,000 increase.

Scotland followed a similar trajectory, with values rising 4.9% to £191,000, up £9,000 on the year.

Northern Ireland recorded the sharpest rise of all UK nations as average prices reached £196,000, up 7.5% or £14,000.

Property sector reaction

Tom Bill, the head of UK residential research at Knight Frank, said: “Although rents are drifting lower from the highs of the pandemic, red tape and tax are still a concern for landlords.

“The introduction of the Renters’ Rights Act this May adds extra layers of uncertainty around the setting of rents, repossession rules and the ability to sell.

“In many areas of London, we are seeing rents pushed higher as landlords attempt to sell and supply is squeezed.”

Nathan Emerson, the CEO of Propertymark, said: “A slowing in the annual growth of rents may offer some relief for tenants but can also be attributed to localised shifts in demand or changes in supply dynamics.

“However, month on month, rent levels continue on an upward trajectory, therefore, policymakers must focus on creating conditions that encourage investment and maintain adequate rental stock to ensure the sector remains stable and able to meet housing need over the long term.”

Richard Donnell, the executive director at Zoopla, said: “Rental growth continues to slow on the back of more supply and weaker demand which is a result of a big drop in migration into the UK and a much improved mortgage market for first time buyers.

“This is improving conditions for renters who have more choice of homes to choose from for the first time in five years.

“We do not see rents falling, but slower growth in rents will be welcome news for renters who have faced steep increase in the cost of living over the last three years.”

Alex Upton, the managing director of specialist mortgages at Hampshire Trust Bank, said: “While rental growth has moderated, the supply and demand imbalance remains firmly in place.

“Tenant demand continues to outstrip available stock, and landlord confidence is under pressure.

“In a market this finely balanced, even a modest reduction in supply can translate quickly into renewed upward pressure on rents.”