"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"
- Colleen Babcock - Rightmove
The latest data released by Rightmove has revealed that average advertised rents across Great Britain rose by 2.2% over 2025, marking the lowest annual rate of rental growth since 2018.
Momentum eased further towards the end of the year, with rents outside London falling in the final quarter as supply and demand moved into closer balance.
Outside the capital, the average advertised rent dropped by 1.1% in Q4, equivalent to £15, leaving the typical monthly rent at £1,370. It was only the second quarterly fall recorded in the past five years. Despite this dip, rents outside London still ended the year £29 higher than in 2024.
London followed a similar pattern. Average rents in the capital declined by 0.7% in the final quarter, or £20, bringing the typical monthly rent to £2,716. Over the full year, rents in London increased by 0.8%, the weakest annual growth rate since 2020, when the pandemic triggered a temporary fall.
Regional performance varied widely. Rents rose by just 0.4% in the North East and 0.8% in London during 2025, while the strongest growth was recorded in the North West at 3.6% and Yorkshire and the Humber at 3.1%.
Rental market activity shows easing competition
The number of homes available to rent is now 9% higher than a year ago, offering tenants more choice than in recent years. Over the longer term, however, supply remains constrained, with available rental stock still down 33% compared with a decade ago.
Competition between tenants has cooled from pandemic-era highs. During 2025, there was an average of ten enquiries for each available rental home, compared with fourteen in 2024. That figure remains above the pre-pandemic average of six enquiries recorded in 2019, underlining that demand still outstrips supply.
Pressure also varies by region. London saw an average of seven enquiries per property last year, while the North West and Scotland experienced more than double that level, with sixteen enquiries per home.
There are tentative signs of improvement on the supply side. UK Finance data covering the year to October shows the most positive rate of landlord investment since 2022, reflecting both new purchases and landlords choosing to retain existing properties. New buy-to-let mortgages used to purchase rental homes were 13% higher than the same period in 2024, while remortgages increased by 23%.
Mortgage rates ease for landlords
Affordability for buy-to-let investors has improved, according to Rightmove’s daily buy-to-let mortgage tracker. The average two-year buy-to-let mortgage rate for a landlord with a 25% deposit now stands at 4.84%, down from 5.51% a year earlier.
Lower borrowing costs could encourage further investment, helping to support a gradual increase in rental supply over time.
Outlook points to moderate growth in 2026
Rightmove expects average advertised rents to rise by a further 2% during 2026. A better balance between supply and demand has already contributed to slower rental growth in 2025, but the underlying shortage of homes to rent continues to exert upward pressure on prices.
“There is still a long-term shortage of available rental homes,” said Colleen Babcock, property expert at Rightmove. “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.”
“Tenants are increasingly focused on value for money,” said Sarah Leslie, lettings manager at Jackson-Stops Sevenoaks. “Pricing accuracy is now critical to maintaining momentum. Homes that are realistically priced for current market conditions are continuing to let well, while those that are over-priced are taking longer to secure tenants.
“Despite this shift, supply constraints are still supporting rents. Overall rental supply remains well below long-term norms, which means rental growth is moderating rather than reversing.
“Tenant priorities are becoming clearer as working patterns continue to evolve. Demand is strongest for well-located homes that offer private outdoor space and good transport links, particularly as more employers encourage a return to office-based working.
“Rents are likely to continue rising at a measured pace, supported by limited supply and ongoing demand.
“In this environment, realistic pricing and professional management are key to achieving consistent, sustainable returns.”
Legislative uncertainty also played a role in slowing activity last year. “Rental prices have been growing at a pace,” said Christina Harris, director at Cheffins. “However, 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. 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.”
