UK private rents climbed 7.0% in the year to May 2025, despite slowing house price inflation and new tax rules dampening sales. The average rent now sits at £1,339 a month, according to fresh figures from the Office for National Statistics (ONS). In contrast, house price growth slowed sharply to 3.5% in the 12 months to April 2025, following a temporary spike linked to changes in Stamp Duty Land Tax (SDLT).
Landlords across the UK remain resilient as tenant demand continues to support robust rental returns—even in the face of regulatory upheaval and political uncertainty. Nathan Emerson, CEO of Propertymark, warned: “There has been much discussion and immense concern for many landlords, with considerable numbers contemplating selling their properties, with the potential to lessen supply even further.”
North East leads rental growth
Regionally, the North East posted the highest rental growth at 9.7%—a record since data collection began in 2015—closely followed by Northern Ireland (7.7%), Wales (8.5%), and London (7.7%). Even in areas where annual increases cooled, rents remained historically high. The South West saw the lowest house price growth in England at just 0.9%, compared to 6.4% in the North East.
London remains the most expensive area to rent, with average monthly costs reaching £2,249. In stark contrast, tenants in the North East paid £733 on average. Across the UK, detached homes commanded the highest average rents at £1,529, while one-bedroom flats remained the most affordable at £1,086.
Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, added: “Tenants will undoubtably welcome the moderation of average monthly rents, but this remains elevated following the record high seen last quarter. The supply of privately rented homes continues to be below pre-pandemic levels and substantially outstripped by demand.”
Stamp Duty shift blamed
April’s slowdown in house price growth came hot on the heels of SDLT changes introduced in England and Northern Ireland on 1 April 2025, which raised taxes on purchases above £125,000 for non–first-time buyers. This prompted a rush to complete transactions in March, with a subsequent lull in April. Nathan Emerson commented: “We had the effect of Stamp Duty threshold changes completely alter consumer habits. The housing market witnessed a sizable uplift in mortgage approvals and property transactions.”
According to the ONS, average UK house prices in April stood at £265,000. Prices rose to £286,000 in England (3.0%), £210,000 in Wales (5.3%), £191,000 in Scotland (5.8%), and £185,000 in Northern Ireland—a 9.5% annual jump in Q1 2025.
Zoopla’s Richard Donnell noted that “rental inflation is slowing as demand cools on lower migration and improved affordability for first time buyers rather than any increase in rent supply,” but he warned that “home prices in the Midlands, northern England and Scotland will continue to rise more quickly than across southern England where affordability is a drag on price rises.”
Policy changes continue to pressure
While rents remain high, landlords are contending with an ever-growing list of compliance obligations and looming legislative reforms. In Scotland, the Housing Bill continues to make its way through Parliament, while England’s Renters’ Rights Bill inches closer to becoming law. These proposals have prompted fears of further disinvestment in the sector.
Sedgwick stressed the long-term imbalance driving rent increases: “The need for privately rented homes will be sustained by predicted population increases and changes to household formation, with more people choosing to live alone or remain in the sector for longer. For this reason, investment in stock must be encouraged and facilitated by favourable economic conditions and balanced regulation.”
As the ONS invites feedback on its Price Index of Private Rents (PIPR) until September, landlords have a rare opportunity to influence how the sector is measured and presented. With inflation falling but housing demand staying firm, the case for incentivising landlord investment has never been stronger.
