UK expects faster growth in rental housing prices
Rent growth rates in the UK have begun to accelerate again after a period of market cooling. Zoopla forecasts that by December, rents for new tenancies could rise by about 4-5% year-on-year due to a reduction in the number of available homes.
According to Zoopla, in July the average rent for new tenancies in the UK was around £1,340 per month. That is 2.6% more than a year earlier. At the same time, the number of homes available to rent fell by about 3% over the year.
At the beginning of the year, the situation for tenants looked more favorable. In March, Zoopla recorded rent growth of only 1.9% year-on-year, and the supply of homes was 11% higher than a year earlier. At that time, the company expected rents to rise by about 2-3% during 2026.
Now the forecast has worsened. According to Zoopla's estimate, by the end of the year the annual rate of rent growth could rise to 4-5%. The main factor remains limited supply: the UK market has faced a shortage of rental housing for several years, and new properties are insufficient to offset demand.
Rents are rising particularly quickly in relatively affordable towns and regions. As early as June, Zoopla reported that in areas with average rents up to £750 per month, rates grew by an average of 5% annually—more than twice the then national average. In Carlisle, rents rose by 9.1%, in Kilmarnock by 9%, and in Halifax by 6.5%.
At the same time, the situation differs significantly by region. Official UK statistics, which include both new and existing tenancies, show that in July the average private rent across the country was £1,393 per month, up 3.7% from a year earlier.
In England, the average rent reached £1,451 per month, in Wales £843, and in Scotland £1,016. Among English regions, rents grew fastest in the North East—by 6.3% over the year—while the slowest growth was recorded in the South East.
Despite the expected acceleration, current rates remain well below those in the first years after the pandemic, when housing shortages and a sharp surge in demand led to double-digit rent growth. However, the reduction in supply means that the period of gradual relief for tenants may prove short-lived.
