Average advertised rents are set to rise by 2% in 2026, matching last year’s growth, as the balance between supply and demand has improved significantly since the pandemic, according to Rightmove.
However, a persistent shortage of rental properties means rents are still expected to climb, in line with the Bank of England’s 2% inflation target throughout 2026.
Rightmove’s property commentator Colleen Babcock said: “There is still a long-term shortage of available rental homes, but it looks like landlords are taking advantage of cheaper available mortgage rates, and more available homes will benefit tenants.
“Existing tenants or those looking to rent their own home for the first time are likely to experience a much more settled and balanced market than a few years ago, when the competition to secure a home was frenetic. There is much greater availability of homes, and fewer tenants to compete with now, which should hopefully make the experience more positive for renters.”
According to Rightmove, the average advertised rent outside London fell by 1.1% in Q4 2025, a drop of £15, marking only the second quarterly decline in the past five years. The average rent in these regions now stands at £1,370 per calendar month. Compared with 2024, rents outside London were still 2.2% higher (+£29), the lowest annual growth at the year-end since 2018.
In London, rents fell by 0.7% in the final quarter, down £20 to £2,716 per month. Overall, the capital recorded 0.8% annual growth in 2025, the slowest since 2020, when the pandemic drove rents down. Regional variations were notable: the North East saw the smallest annual rise (+0.4%), while the North West (+3.6%) and Yorkshire & The Humber (+3.1%) recorded the highest increases.
Available rental properties are up 9% compared with 2024, although long-term figures show a 33% decline in stock compared with ten years ago, reflecting a persistent shortage. UK Finance data indicates that buy-to-let investment is strengthening: the number of new buy-to-let mortgages in the year to October 2025 rose 13% on 2024, while remortgages increased 23%.
Tenant competition has eased compared with the pandemic years. In 2025, there were on average ten enquiries per available rental property, down from 14 in 2024 but still above the pre-pandemic 2019 average of six. Regional differences persist, with London averaging seven enquiries per property, while the North West and Scotland saw 16.
Nathan Emerson, CEO of Propertymark, commented: “These figures show the rental market is gradually moving away from the volatility of recent years and towards a more balanced position. Slower annual rent growth and modest quarterly falls in some areas will offer some relief to tenants after a prolonged period of sharp increases.
“However, moderation should not be mistaken for recovery. Rental supply remains well below the pace needed across the long-term to stay in keeping with demand. While competition has eased, demand is still higher than pre-pandemic norms in many parts of the country. This imbalance continues to place upward pressure on rents.
“Improving buy-to-let mortgage affordability and working objectively to renew landlord confidence are encouraging signs, but long-term policy stability will be essential if this is to translate into a sustained increase in supply. Without this, rents may rise more slowly but are unlikely to fall.
“Moving further into 2026, a steady increase in rents reflects a market that is calmer, but still constrained, underlining the need for continued investment in the private rented sector.”
Christina Harris, director, Cheffins, acknowledged rental prices have been growing at pace, however added that the slowdown in growth last year was partly caused by “uncertainty in the lead up to the Budget and the release of the details of the Renters Rights Act”.
She said: “In general, most tenants were only moving if absolutely necessary, preferring to wait for clarity on both the Budget and new legislation.
“Rental growth had been exceptionally strong for some time, well ahead of inflation, so a period of moderation was inevitable. Towards the end of last year we also saw an increase in supply, but as wages had not kept pace with rental values, affordability became a key issue for many tenants. With tenants typically needing to earn around three times the cost of rent, average rents in cities such as Cambridge were simply out of reach for some.
“Supply remains far behind where it needs to be. The consistent shortage of good quality, well-presented rental properties will no doubt put upward pressure on rents in the coming months. People still need to move for work or schools, and as the shortage of availability continues, it is likely that prices will edge up over the next year.
“While many landlords were cautious in the lead up to the Renter’s Rights Act, in the main, rental properties continue to provide a good return on investment, better than what can be found in most savings accounts and we haven’t yet seen the exodus from the market from landlords which so many predicted.”
Read the orginal article: https://propertyindustryeye.com/average-rent-growth-to-align-with-2-inflation-target-this-year-rightmove-says/?utm_source=rss&utm_medium=rss&utm_campaign=average-rent-growth-to-align-with-2-inflation-target-this-year-rightmove-says
