Private rents increased by 5% in the 12 months to October 2025, according to new ONS data, marking the slowest annual rise since August 2022. While growth has cooled from September’s 5.5%, landlords remain under strain from mortgage costs, policy uncertainty, and a widening supply-demand imbalance.
Rent growth trends stabilising
The average UK rent now stands at £1,360 per month, up £65 year-on-year. England leads in absolute figures at £1,416, followed by Scotland at £1,008, Northern Ireland at £866, and Wales at £817.
Regional differences remain stark. The North East recorded the highest rate of growth at 8.9%, while Yorkshire and The Humber saw the lowest at 3.8%. For landlords still adjusting to elevated borrowing costs, especially those refinancing post-2021, yield improvements – however modest – offer a degree of financial reassurance.
In Wales, annual inflation cooled from 7.1% to 6.7%, while Scotland held steady at 3.4%, continuing a sharp slowdown since the peak of 11.7% in August 2023. Scotland’s rent controls remain a complicating factor, with ONS confirming data limitations due to reliance on advertised lets rather than in-tenancy adjustments.
Northern Ireland rents increased 6.6% year-on-year, based on available data to August 2025. The ONS notes future revisions could alter figures as recently integrated models bed in.
Commenting on rental prices, Nathan Emerson, CEO of Propertymark, said:
“An increase in rental prices highlights the continuing pressures faced by the private rented sector. While rising rents may reflect strong demand and limited supply, they also intensify the affordability challenges many tenants are already experiencing.
Letting agents and landlords will need to navigate these conditions carefully, ensuring any increases remain fair and sustainable. Policymakers must recognise that persistent rental inflation points to a system struggling to meet demand and respond with measures that encourage more homes into the sector rather than driving landlords out.”
UK house prices see slower growth
House prices also showed easing momentum. The average UK home is now valued at £272,000, 2.6% higher year-on-year, down from 3.1% growth in August 2025. England recorded the slowest increase at 2%, while Scotland saw the fastest at 5.3%.
For buy-to-let investors, softer pricing could reopen acquisition opportunities, particularly for portfolio landlords with cash reserves or those restructuring into limited companies to improve tax efficiency.
Mortgage product availability has also improved modestly in late 2025, according to brokers, although many warn lenders remain cautious with higher rental stress test thresholds still in place.
One London letting agent recently commented to industry press that many accidental landlords exiting the market “haven’t realised how strong tenant demand still is – properties that would have taken two weeks to let in 2019 now move within 48 hours, often with multiple applications.”
Specialist finance and long-term supply challenges
Reacting to the new ONS figures, Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, said:
“Rental inflation may be easing, but that doesn’t mean pressure in the private rented sector has disappeared. Many tenants still face high rents, and the underlying structural issue remains unchanged, with demand continuing to outstrip supply.”
She added that the Renters’ Rights Act, currently progressing through parliament, highlights the need for balance, warning that investor confidence must not be eroded further:
“A stable regulatory and economic framework is critical if we are to reverse the ongoing imbalance between rental demand and supply.”
Landlord groups, including the NRLA, have repeatedly argued that years of restrictive tax and policy reform have contributed to the shortage, with ONS vacancy and supply metrics supporting this trend.
Editor’s view
Rental inflation slowing will inevitably become a headline that some will use to argue the market has “normalised”. But landlords know the reality is more complex. Costs remain high, demand is relentless, and policy reform often feels like a one-way pressure valve.
If the upcoming Budget provides meaningful tax relief or investment incentives, 2026 could see a more balanced, investable environment. If not, the gap between supply and demand may widen further – and tenants will feel it most.
Author: Editorial team – UK landlord and buy-to-let news, policy, and finance
Published: 19 November 2025
Sources: ONS PIPR release; UK HPI data; Paragon Bank public comment
Related reading: Rent growth forecast to rise 12% as market normalises, says Savills
