The private rented sector in England saw annual rents increase by 2% in 2025, according to the Goodlord rental index. However, this growth rate represents a significant slowdown compared to earlier in the year, signalling a cooling rental market that landlords should monitor closely.

Overview of Rent Growth in 2025

Rents across England averaged £1,214 in December 2025, down from £1,245 in November. This monthly decrease of £31 helped reduce annual rental expenditure for new tenants by approximately £372. Despite this monthly dip, the overall year-on-year increase of 2% indicates that rents continued to rise, albeit at a slower pace than the 4.6% inflation peak seen earlier in 2025.

The typical seasonal slowdown in demand during winter months contributed to the monthly rent reduction. Tenants faced less competition for properties, which is reflected in the slight fall in average rents. For landlords, this seasonal trend is important to consider when setting rents and managing expectations during quieter periods.

Implications for Landlords in 2026

William Reeve, Chief Executive of Goodlord, commented on the rental market outlook: “Whilst it’s too soon to tell for sure whether this is a seasonal blip or the beginning of a cooler run of inflationary pressures, the wider signs indicate that 2026 will be another intense year for the market.”

Landlords should be aware that regulatory changes, such as the upcoming Renters’ Rights Act, may impact supply. Mr Reeve noted that if landlords choose to exit the market in response to new regulations, this could tighten supply and push rents higher, potentially leading to “another record breaking year” for rental prices.

Understanding these dynamics is crucial for landlords and letting agents planning their strategies for the year ahead. Balancing rent levels with tenant demand and regulatory compliance will be key to maintaining occupancy and maximising returns.

Vacancy Periods and Regional Variations

The Goodlord rental index also highlights changes in void periods across regions. Vacancy durations lengthened in the South East and North West, while remaining stable in Greater London. Conversely, voids shortened in the East Midlands, North East, South West, and West Midlands.

Year-on-year, the average vacancy period increased from 21 days in December 2024 to 23 days in December 2025. Longer void periods can affect landlords’ rental income and cash flow, emphasising the importance of proactive property marketing and tenant retention strategies.

What This Means for UK Landlords

For landlords and property managers, the 2% annual rent increase combined with slowing growth suggests a more cautious rental market environment. While rents continue to rise, the reduced pace may reflect changes in tenant affordability and market competition.

Landlords should keep abreast of legislative developments such as the Renters’ Rights Act, which could influence landlord supply and demand dynamics. Preparing for potential shifts in the market by reviewing rental pricing, tenancy terms, and property maintenance can help mitigate risks associated with longer voids and regulatory changes.

Looking Ahead: TLA’s Trusted Partners Hub

The Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This platform will feature verified and approved service providers selected to support landlords, tenants, and property management businesses. Legal, trades, insurance, financial, mortgage, tenant screening, and other service providers are invited to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/.