Rental growth is accelerating in some of the UK’s most affordable markets as a chronic shortage of homes to let continues to put upward pressure on prices, despite demand from tenants easing to a six-year low.
New figures from Zoopla show rents are rising by an average of 5% in areas where monthly rents are below £750, more than double the national rate of rental inflation of 2.1%. The sharpest increases were recorded in Carlisle (9.1%), Kilmarnock (9.0%) and Halifax (6.5%), where rents remain well below the UK average despite recent growth.
The property portal said a lack of available rental stock is continuing to drive rents higher across much of the country, with every region still having between 20% and 30% fewer homes available to rent than before the pandemic. Zoopla attributed the shortage to a lack of new investment in the private rented sector, limiting choice for tenants and sustaining upward pressure on rents.
The findings come despite signs that competition between renters is easing. The average number of enquiries per rental listing has fallen to 5.6, its lowest level since 2020 and well below the peak of almost 16 enquiries per property recorded in 2022.
At the same time, rental affordability has improved, with average earnings growing by 4% annually compared with rental inflation of 2.1%. Zoopla said this marks 18 consecutive months in which wage growth has outpaced rent rises.
However, the picture varies significantly across the country. While rents continue to climb in lower-cost markets, several major cities have seen rents fall over the last year, including Bournemouth (-1.7%), Nottingham (-1.5%) and Birmingham (-1.1%), where affordability constraints and weaker demand have limited landlords’ ability to increase rents.
London remains the exception. The capital was the only region to record an increase in rental demand, with tenant enquiries up 6% year-on-year. Average rents in London have risen to £2,206 per month, with annual rental growth accelerating to 2.2%.
Zoopla expects rents to increase by between 2% and 3% over the remainder of 2026 but warned that affordability gains could prove short-lived unless more homes are brought into the rental market.
Rental Inflation by Region: Highest and Lowest Postal Areas
Region / Country | Avg Rent (pcm) | Annual Change | Postal Area | Avg Rent (pcm) | Annual Change | Highest / Lowest |
|---|---|---|---|---|---|---|
North East | £766 | 3.8% | Darlington (DL) | £634 | 3.9% | Highest |
Sunderland (SR) | £643 | 2.5% | Lowest | |||
North West | £961 | 3.3% | Carlisle (CA) | £739 | 9.1% | Highest |
Manchester (M) | £1,186 | 2.4% | Lowest | |||
Yorks & Humber | £865 | 2.8% | Halifax (HX) | £746 | 6.5% | Highest |
Bradford (BD) | £751 | 1.5% | Lowest | |||
East Midlands | £920 | 0.8% | Lincoln (LN) | £874 | 5.8% | Highest |
Nottingham (NG) | £927 | -0.9% | Lowest | |||
West Midlands | £977 | 0.4% | Telford (TF) | £909 | 6.3% | Highest |
Birmingham (B) | £1,035 | -1.1% | Lowest | |||
East of England | £1,250 | 1.8% | Ipswich (IP) | £1,035 | 3.1% | Highest |
Peterborough (PE) | £932 | -1.6% | Lowest | |||
London | £2,206 | 2.2% | Bromley (BR) | £1,708 | 5.2% | Highest |
Ilford (IG) | £1,772 | 0.2% | Lowest | |||
South East | £1,391 | 1.6% | Oxford (OX) | £1,520 | 3.8% | Highest |
Maidstone (ME) | £1,244 | -0.4% | Lowest | |||
South West | £1,152 | 2.4% | Dorchester (DT) | £1,069 | 5.3% | Highest |
Bournemouth (BH) | £1,235 | -1.7% | Lowest | |||
Wales | £953 | 1.5% | Llandrindod Wells (LD) | £712 | 5.9% | Highest |
Swansea (SA) | £847 | 0.0% | Lowest | |||
Scotland | £884 | 1.4% | Kilmarnock (KA) | £656 | 9.0% | Highest |
Aberdeen (AB) | £731 | 0.8% | Lowest |
Richard Donnell, executive director at Zoopla, said: “We’re seeing a split in how different regions and cities are responding to changes in the supply and demand for rented homes. Our latest report shows just how fast the gap in rents is closing between more affordable regions and major cities where rents are highest. Rent inflation is more subdued across most of the UKs major cities due to already stretched affordability levels for renters”
“While demand for renting is at its lowest level for six years, low levels of new investment in private rented housing means an ongoing scarcity of homes for rent which is keeping an upward pressure on rents.”
“It’s positive that earnings continue to grow faster than rents at a national level but the experience of renters in local areas varies widely and is a challenge for lower income renters. Growing the supply of rental homes is the single most effective way to improve affordability for private renters, particularly those in traditionally more affordable areas who have the fewest choices and are facing the sharpest increases.”
Read the orginal article: https://propertyindustryeye.com/rental-stock-shortages-continue-to-drive-rent-growth/?utm_source=rss&utm_medium=rss&utm_campaign=rental-stock-shortages-continue-to-drive-rent-growth
