Rents on newly let homes have fallen for the first time, with the South of England driving a broader cooling across the market. Data from Hamptons shows average rents on new lettings declined by 0.2 percent in the year to January 2026, bringing the typical rent to £1,366 per month.
London leads rental decline
Inner London rents have now been falling for 13 consecutive months, with Outer London experiencing eight months of decline. The South East, closely tied to the capital’s economy, has seen four months of annual falls. Together, these regions account for around one-third of Britain’s rental homes.
Greater London saw newly let rents fall 1.3 percent year-on-year to £2,283 per month. For renewing tenants in London, rents dropped 1.5 percent to £2,222 per month – the only region where renewals declined. The shift marks a significant change from the double-digit growth seen during the post-pandemic recovery.
Regional variations persist
Rental growth on newly let homes has run below 1 percent for four consecutive months in both the East of England and the South West. Scotland saw newly agreed rents fall annually for the first time since July 2020, signalling the unwinding of steep rises linked to rent controls enforced by the Scottish government between 2022 and April 2025.
In Yorkshire and The Humber, rents on newly let homes have been falling for six months, down 1.4 percent in January to £915 per month. The North West showed stronger growth at 3 percent, with average new let rents reaching £1,031 per month.
Renewing tenants face higher costs outside London
While new lettings see softening prices, tenants renewing contracts face continued increases. Excluding London, renewed rents across Great Britain rose 5.2 percent in January to £1,070 per month. The North West recorded the highest renewal increase at 7.2 percent, followed by the North East at 5.7 percent.
The data suggests landlords are achieving higher rents from existing tenants while competing for new tenants in a market where affordability constraints are finally biting. With Hamptons data showing consistent monthly declines, the rental market appears to be finding a new equilibrium after years of exceptional growth.
Editor’s view
Falling rents in the South signal that affordability has finally hit its ceiling. For landlords, this means pricing realism is now essential – but renewal increases show that quality tenants still pay a premium to stay put.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 17 February 2026
Sources: Hamptons, Connells Group
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