"Landlord behaviour is shifting. Expansion is no longer the default strategy. Many smaller investors are reassessing exposure where returns have been eroded by taxation and regulation, and some are choosing to exit selectively."
- Alex Upton - Hampshire Trust Bank
UK private rents rose 3.5% in the 12 months to January 2026, bringing the average monthly rent to £1,367, according to provisional ONS figures. That marks a slowdown from 4.0% growth in the 12 months to December 2025 and is the lowest annual inflation rate since March 2022.
National breakdown
According to ONS data, growth varied considerably across the nations. In England, the average monthly rent reached £1,423, up 3.5% (£48) year-on-year, easing from 3.9% in the previous period and also the lowest annual growth rate since March 2022. Wales saw stronger momentum, with average rents rising 5.8% (£45) to £826, slightly ahead of the 5.7% recorded to December 2025, though well below the record high of 9.9% in November 2023.
Scotland's average monthly rent reached £1,021, up 2.6% (£25), a slower pace than the 2.8% recorded to December 2025 and the lowest annual rise in more than four years. Scotland's growth has been decelerating since hitting a record high of 11.7% in August 2023. In Northern Ireland, average rents rose 5.6% to £875 in the 12 months to November 2025.
Regional Breakdown
Within England, the North East recorded the highest regional inflation at 8.0%, edging up from 7.9% in the previous period. London sat at the other end of the scale, with annual rent inflation of just 1.1%, down from 2.1% in the 12 months to December 2025. London's growth has slowed the most sharply from its peak, falling 10.4 percentage points since November 2024, when it stood at 11.5%.
Average rents reflect those regional contrasts clearly. London remains the most expensive area at £2,253 per month, while the North East is the cheapest English region at £767. At a more local level, Kensington and Chelsea commands the highest average monthly rent in England and Wales at £3,640, while Dumfries and Galloway in Scotland is the lowest at £549. Outside London, Oxford in the South East is the most expensive local area at £1,923 per month.
By property type, detached homes attracted the highest average monthly rent at £1,563, with flats and maisonettes the lowest at £1,334. Larger homes also command a premium, with four-or-more-bedroom properties averaging £2,037 per month compared to £1,109 for one-bedroom homes.
Alex Upton, managing director, specialist mortgages & bridging finance, Hampshire Trust Bank, said, “While rental growth has moderated, the supply and demand imbalance remains firmly in place. Tenant demand continues to outstrip available stock, and landlord confidence is under pressure. In a market this finely balanced, even a modest reduction in supply can translate quickly into renewed upward pressure on rents.
“Landlord behaviour is shifting. Expansion is no longer the default strategy. Many smaller investors are reassessing exposure where returns have been eroded by taxation and regulation, and some are choosing to exit selectively."
"At the same time, more professional landlords are consolidating and repositioning rather than retreating. There is a clear move towards assets that offer stronger income resilience, including HMOs, semi-commercial and mixed-use property. Incorporation remains a consistent trend, but it introduces complexity around structuring, tax planning and long-term funding."
“These adjustments are changing the shape of funding demand. Landlords are not simply refinancing at maturity. They are releasing capital selectively, restructuring ownership, consolidating borrowing and adapting portfolios to reflect tighter regulatory requirements. That requires assessment based on judgement and experience, particularly where portfolios span multiple assets or income models."
“A sustainable rental sector depends on confidence and clarity. If policy, taxation and funding conditions continue to feel uncertain, investment decisions will remain cautious. Over time, that caution feeds directly into supply. Stability in the rental market depends on consistent signals and finance that supports long-term viability.”
Nathan Emerson, CEO of Propertymark, comments, “A slowing in the annual growth of rents may offer some relief for tenants but can also be attributed to localised shifts in demand or changes in supply dynamics.
“However, month on month, rent levels continue on an upward trajectory, therefore, policymakers must focus on creating conditions that encourage investment and maintain adequate rental stock to ensure the sector remains stable and able to meet housing need over the long term.”
Richard Donnell, executive director at Zoopla, said, "Rental growth continues to slow on the back of more supply and weaker demand, which is a result of a big drop in migration into the UK and a much improved mortgage market for first-time buyers. This is improving conditions for renters who have more choice of homes to choose from for the first time in 5 years. We do not see rents falling, but slower growth in rents will be welcome news for renters who have faced steep increase in the cost of living over the last 3 years."
