UK rental market cools, but the picture is patchy

Rent growth across the UK is slowing down, at least on paper. The latest official figures put annual rental inflation at its lowest rate in years, and the days of double-digit rent hikes and dozens of people queuing for a single viewing look to be firmly behind us. But look past the national headline and the story gets more complicated. In some towns rents are falling outright. In others they are still climbing by close to 10% a year. For landlords and tenants alike, the average figure is becoming less and less useful as a guide to what is actually happening on their own street.

What the latest data shows

Official figures from the Office for National Statistics show UK private rents rose by 3.3% in the 12 months to May 2026, taking the average monthly rent to £1,383. That is down from 3.5% the month before, continuing a slowdown that has been running since late 2024. Zoopla's most recent rental market report tells a similar story using asking rents on new lets, with UK-wide growth of 2.1% and the average new let now costing £1,321 a month.

The gap between those two figures comes down to methodology: the ONS tracks rents across all tenancies, including people who have been in their home for years, while Zoopla looks specifically at rents advertised on new lets. Either way, the direction of travel is the same. Rents are still rising, but at a noticeably gentler pace than the market has seen in recent years.

Demand has eased substantially too. Zoopla recorded an average of 5.6 enquiries per available rental home in May 2026, down from a peak of 15.5 in 2022. Fewer people fighting over each property naturally takes some of the heat out of asking prices, even where supply remains tight.

A two-tier market

The national average hides a lot of local variation. Within England, the ONS found annual rental inflation ranging from 2.0% in London up to 5.9% in the North East. Zoopla's figures show an even wider spread: rents in Carlisle, Kilmarnock and Halifax are rising by 6.5% to 9.1% a year, while Birmingham, Nottingham and Bournemouth have actually seen average rents fall over the past 12 months.

There is also a clear split by price point. Cheaper areas, where rents sit below £750 a month, are seeing growth of close to 5%, roughly double the national rate. More expensive areas above £1,250 a month are growing at or below the UK average. Affordability pressure appears to be pushing demand, and therefore rent growth, toward the lower end of the market rather than the top.

Wales and Northern Ireland are also running hotter than England, with rents up 4.7% and 3.3% respectively, while Scotland has cooled markedly to just 1.0%, its lowest annual growth in almost a decade.

Why London is the exception

London is the one region bucking the cooling trend on the demand side. Zoopla recorded a 6% increase in rental demand in the capital over the four weeks to 31st May 2026, the only region in the UK to see demand rise rather than fall. Higher mortgage rates are widely seen as the driver, with would-be first-time buyers priced out of purchasing and staying in rented accommodation for longer instead. Even so, London's annual rent growth remains the lowest of any English region at 2.0%, a reflection of just how high the base rent already is (£2,294 a month on average, compared with £776 in the North East).

Why rents are still rising at all

Given how much demand has fallen since 2022, it might seem odd that rents are rising anywhere. The answer is supply, which has simply not recovered. Zoopla estimates there are still 20% to 25% fewer rental homes on the market than before the pandemic, a gap that several years of softer demand has not been enough to close. Some of that shortage is structural: a steady trickle of landlords selling up rather than remortgaging at higher rates, tighter regulation increasing the cost of letting a property compliantly, and new-build supply that has not kept pace with household formation.

Until supply catches up, even modest demand can keep pushing rents higher in the areas where stock is tightest, while areas with a healthier supply of rental homes see rents flatten or fall.

What this means if you're a landlord

If you are due a rent review, it is worth checking local figures rather than relying on the national average. In a strong-demand area with limited stock, an above-average increase may be entirely justified and well tolerated by tenants who know their options are limited. In a softer local market, pushing too hard risks a costly void period, and it may be better to retain a good tenant at a smaller increase than to relet at a higher headline rent with a gap in between.

This is also a reasonable moment to review whether you are getting best value from how your property is managed. A fully managed service can take the guesswork out of pricing a rent review correctly and handle tenant retention on your behalf, while a tenant find service is worth considering if you are about to relet and want to fill a void quickly with a well vetted tenant.

What this means if you're a tenant

Softer demand does not mean rents are about to fall everywhere, but it does shift the balance of negotiating power in a growing number of areas. If you are renewing in a location where rents are flat or falling, it is reasonable to push back on a proposed increase, and landlords with fewer competing applicants may be more willing to negotiate than they were a couple of years ago. In tighter markets, particularly London and parts of the North East, expect less room to negotiate and be ready to move quickly on properties that fit your budget.

The takeaway

The national rent growth figure is a useful headline, but it is no longer a reliable guide to what will happen at renewal time on any individual street. Landlords should benchmark against local comparables before setting a new rent, and tenants have more room to negotiate in some areas than the national numbers suggest. If you are a landlord weighing up whether to relet, remortgage or sell in the current market, Moovehub's tenant find service and fully managed service can help you make that decision with clear, flat-fee pricing, and if selling up looks like the right move, our sell your home service is built for exactly that.