The rental market in England is showing early signs of softening, according to Goodlord’s latest Rental Index. In January, rents rose 2.4% year-on-year, significantly lower than the 4.6% recorded at the same time last year, suggesting cooling tenant demand after years of intense competition.
The average cost of a rental property in England in January 2026 was £1,201, up from £1,174 a year earlier. This annual increase now sits below consumer price inflation, which was 3.6% in December, and below quarterly wage growth of 4.5%, highlighting the slower pace of rental inflation.
Most regions saw rising rents over the year, with the North East leading at a 6% increase. The East Midlands, North West, South East, and South West all recorded growth above 3%. The East of England was the only region to see a decline, with rents falling 1.9% year-on-year.
Month-on-month, January rents rebounded 2% after a December dip, climbing from £1,178 to £1,201 on average. Regional shifts were mixed:
North East: +8%
South West: +6%
London: +3%
South East, East of England, Yorkshire and the Humber: slight declines
Voids—the time a property sits empty between lets—also lengthened, pointing to softer demand. The national average rose from 23 to 26 days, with six out of nine regions seeing increases:
North West: 18 → 26 days
East of England: 21 → 32 days
London: only region with shorter voids
William Reeve, CEO of Goodlord, said: “Whilst prices will continue to go up, the underlying signs point to what could be the return of some equilibrium to the market. The lower pace of annual rental inflation, especially compared to last January, combined with lengthening voids may indicate the early signs of softening demand."
"With current rental inflation now sitting well below the CPI and wage growth, this could swing the pendulum of power slightly back towards tenants following several years of ferocious competition for properties.”
He added that the upcoming Renters’ Rights Act, set for implementation in May 2026, could still alter rental trends across England.
