The rental market continues to cool, with UK rent inflation slowing to its lowest annual rate since March 2022, according to the latest ONS data. 

Its Private Rent and House Price data reveals the average monthly private rent in the UK was £1,367 in January, 3.5% higher than 12 months ago but down from 4% in the 12 months to December.

Renters are paying an average of £1,423 in England, up 3.5% (£48) year-on-year. This represents a slowdown from the 3.9% annual increase in the 12 months to December, and the lowest annual growth rate since March 2022.

Highest

The North East continued to have the highest rent annual inflation rate of all English regions, at 8%, while it remained lowest in London, at 1.1%.

Average monthly rent for Wales was £826, up 5.8% (£45) from a year earlier, while in Scotland it was £1,021, up 2.6% (£25) from the year before. This annual rise in Scotland (mainly for advertised new lets) was lower than in the 12 months to December (2.8%) and represents the lowest annual rise for more than four years.

Average monthly rent (for advertised new lets) in Northern Ireland was £875 in November 2025, up 5.6% (£46) from a year earlier and lower than in the 12 months to October 2025 (5.7%).

Imbalance

While rental growth has moderated, the supply and demand imbalance remains, says Alex Upton, MD at Hampshire Trust Bank. She has noticed some smaller landlords exiting and more professional landlords consolidating and repositioning rather than retreating. “There is a clear move towards assets that offer stronger income resilience, including HMOs, semi-commercial and mixed-use property,” says Upton.

These adjustments are changing the shape of funding demand. “Landlords are not simply refinancing at maturity. They are releasing capital selectively, restructuring ownership, consolidating borrowing and adapting portfolios to reflect tighter regulatory requirements.

“If policy, taxation and funding conditions continue to feel uncertain, investment decisions will remain cautious. Over time, that caution feeds directly into supply.”

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