Newly agreed rents across Great Britain dipped 0.7% in 2025, marking the first annual decline since Hamptons began tracking the market in 2011. The average tenant moving into a property paid £1,371 per month, £10 less than the previous year for the same home.
The Hamptons Lettings Index, which draws on rental data from across the Connells Group, showed that while rents had dipped year-on-year in individual months before, 2025 represented the first full calendar year of decline.
Five of Britain's 11 regions recorded falling rents by year end, up from none at the end of 2024. London led the decline with rents down 2.7%, or £63 per month, returning to June 2023 levels. Rents began falling in the capital in January 2025, with other regions following as the year progressed.
The South East saw rents drop 1.0%, while Yorkshire and Humber recorded a 1.4% decline. Wales posted a 0.8% fall, and the East Midlands dipped 0.2%. Three additional regions posted growth below 1.0%, suggesting they could tip into negative territory in early 2026. The East of England grew 0.5%, the South West 0.7%, and Scotland 0.5%.
Stock levels tell part of the story. The number of homes available to rent ended December 6% higher than 2024 and sat just 8% below 2019 levels. During the post-Covid boom, when rents were rising by double digits, available homes fell 52% below 2019 figures. However, December's stock increase primarily reflects weaker demand from renters rather than a surge in new landlord purchases.
Landlord activity continued its decline throughout 2025. Just 10.9% of properties in Great Britain were bought by landlords, down from 12.0% in 2024 and well below the 15.8% recorded in 2015, before the 3% stamp duty surcharge was introduced in 2016.
This marks the lowest share since records began in 2012 and the first time the figure has fallen below 11.0% over a full calendar year. The drop comes during the first full year in which landlords paid the higher 5% stamp duty surcharge.
The North East remained the most investor-heavy region, with landlords accounting for 29.0% of purchases, the highest figure by a significant margin in any region. The East Midlands followed at 15.1%, with the West Midlands at 15.0%.
Northern England still leads for buy-to-let purchases, but falling interest rates boosted appetite in southern regions during 2025. The South East, East of England and North East were the only three English regions to record a year-on-year increase in the share of homes bought by investors.
Newly agreed rents typically set market rates in an area, with renewal rents gradually moving closer to this level. The average cost of a contract renewal rose 3.3% annually to £1,310 per month across Great Britain in 2025. This left a £61 gap between new lets and renewals, the smallest differential since July 2021 and down from a peak of £170 per month in October 2023.
"On paper, 2025 looked like a good year for tenants," said Aneisha Beveridge, head of research at Hamptons (pictured). "Rents on new lets ended 2025 lower than they started, and tenants had more choice than before."
"However, falling rents were driven more by strong first-time buyer numbers and wider economic weakness than by improved tenant affordability. Fewer tenants are taking their first step into the rental market, with many staying at home longer and being reluctant to commit to the cost of renting a place of their own."
The Renters' Rights Act, which bans offers above the asking rent, will be implemented in May 2026. Beveridge explained that this means agreed rents and advertised rents may start to rise at different rates.
"The block on landlords accepting a price above what they asked for is likely to push up advertised rents, with more tenants making offers below the higher asking price instead," she added. "However, at least initially, it is unlikely to impact the values actually being achieved."
She noted that towards the back end of 2026, implementation of the Renters' Rights Act may start proving inflationary for agreed rents.
"If landlords start to find the procedural and legal machinery underpinning the new rules lacking, it is likely to slowly squeeze rental homes out of the market," Beveridge said. "From a supply perspective, the lack of appetite means the share of homes bought by investors could fall below 2025's already low levels."
