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Rents increase again in July as landlords face rising costs and reform uncertainty


Average monthly rents climb to £1,313 in July 2025, the seventh consecutive monthly rise, according to HomeLet’s latest Rental Index. While growth is slowing, the continued mismatch between demand and supply—compounded by policy uncertainty—is putting pressure on both rent levels and landlord confidence.

Regional rent increases continue despite cooling market
Across the UK, rents outside London rose to £1,132, up 0.4% month-on-month and 1.7% annually, with Scotland (+2.1%), Wales (+1.6%), and the North East (+1.2%) posting the biggest monthly gains. Yorkshire and the Humber stood out with the largest annual rise of 4.5%, while Greater London was down 0.9% year-on-year, pointing to diverging regional trends.

Rents increase again in July as landlords face rising costs and reform uncertainty Landlord KnowledgeWill Eastman, Head of Legal at HomeLet and Let Alliance (pictured), said: “Rental prices continue to edge upwards, and market uncertainty appears to be playing a role. Legislative reform, rising costs, and shifting risk factors are prompting some landlords to reconsider their long-term plans.”

Although national rent growth has slowed since the post-pandemic peak, landlords in high-demand areas still report upward pressure on pricing—particularly for one- and two-bedroom homes. Some regions, however, are beginning to see signs of rental fatigue, especially where affordability is stretched or local supply has improved.

Landlords rethinking strategy as reform risk looms
The Renters’ Rights Bill, now nearing its final parliamentary stages, is casting a long shadow over the private rented sector. With proposals such as the abolition of fixed-term tenancies, mandatory pet acceptance, and new restrictions on advance rent, landlords face a shifting legal framework with significant financial implications.

Eastman warned the changes “may inadvertently reduce confidence among some landlords”, especially when layered on top of ongoing mortgage pressures and operating cost increases.

Many landlords are now exploring ways to manage risk, such as rent guarantee insurance or shifting focus to lower-risk segments. Others are pausing expansion plans—or exiting altogether. While this can free up stock in the short term, it also risks weakening overall supply just as demand stabilises.

Tenant affordability still driving pricing conversations
Letting agents across the UK say tenant affordability is now a primary consideration when setting rents. Landlords are increasingly sensitive to pricing too high, especially with longer void periods starting to re-emerge in certain markets.

Alex Caddy, lettings manager at Clarkes, recently noted: “Competitively priced, well-presented properties are still letting quickly. But there’s definitely more choice for tenants this year, and landlords who ignore that risk being left behind.”

Even in high-performing regions like Yorkshire, Wales, and parts of the North West, agents are advising landlords to price in line with local incomes and remain flexible—particularly when letting larger homes or HMOs, where demand can fluctuate more sharply.

HomeLet’s latest Rental Index was released today: Average rent in the UK rises slightly in July.

 

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