Recent data from Zoopla highlights a notable trend in the UK rental market: areas with traditionally lower average rents are experiencing the most significant increases in rental prices, even as overall rent growth across the country slows. This development reflects ongoing supply constraints and shifting demand patterns, which are critical for landlords, letting agents, and property professionals to understand in managing their portfolios effectively.
Sharp Rent Increases in More Affordable Locations
Zoopla’s latest Rental Market Report reveals that regions where the average monthly rent is £750 or less are seeing annual rent rises of approximately 5%, more than double the national average increase of 2.1%. Notable examples include Carlisle, where rents have surged by 9.1%, Kilmarnock with a 9% rise, and Halifax at 6.5%. Despite these substantial percentage increases, the absolute rent levels in these areas remain relatively low, averaging around £700 per month, which is still 45% to 50% below the UK average rent.
This pattern suggests that while rents in major cities have plateaued or grown modestly, more affordable markets are catching up, narrowing the rental price gap between regions. Landlords operating in these areas should be aware of this dynamic as it may influence tenant demand and rental income potential.
Closing the Rental Gap Between Regions
Richard Donnell, Executive Director at Zoopla, notes a clear divergence in rental market behaviour across the UK. While rental inflation in major cities remains subdued—largely due to affordability pressures on renters—more affordable regions are experiencing faster rent growth. This trend reflects a rebalancing as demand shifts towards areas with lower entry costs for tenants.
However, overall tenant demand has decreased to its lowest level in six years, a factor that might typically ease rental pressures. Yet, the limited supply of new private rented homes continues to restrict availability, maintaining upward pressure on rents. This scarcity is a key factor underpinning the rental increases in lower-cost areas despite the broader slowdown in demand.
Rental Declines in Higher-Cost Urban Centres
Conversely, some higher-cost cities are witnessing rent reductions or very modest growth. For instance, Bournemouth has seen rents fall by 1.7%, Nottingham by 1.5%, and Birmingham by 1.1%. These declines contribute to the overall national rent inflation easing from 2.6% in April 2025 to 2.1% in April 2026. Meanwhile, average earnings have increased by 4%, meaning wage growth has outpaced rent inflation for the past 18 months, which may alleviate some affordability concerns in these regions.
Such trends highlight the complex and varied nature of the UK rental market, where local economic conditions, housing supply, and tenant affordability all play significant roles in shaping rent levels.
Persistent Supply Shortages Across the UK
Despite changes in demand, the supply of rental properties remains significantly below pre-pandemic levels. Zoopla reports that every UK region and country currently has between 20% and 30% fewer homes available to rent than before the pandemic. This shortage contributes to sustained competition for rental properties, even as the number of enquiries per listing has decreased from nearly 16 in 2022 to 5.6 in May 2026, the lowest in six years.
London stands out as an exception, with rental demand increasing by 6% year on year and the number of available rental homes remaining stable. Rent inflation in London has also risen slightly to 2.2%, with the average monthly rent now at £2,206. Zoopla anticipates that rent inflation across the UK will remain between 2% and 3% for the remainder of 2026.
Tenant Demand Continues to Outpace Supply
Nathan Emerson, Chief Executive of Propertymark, emphasises that the persistent shortage of rental properties is a fundamental issue driving rent increases, particularly in traditionally lower-cost areas. Limited housing supply, combined with steady tenant demand, creates upward pressure on rents that outstrips the national average growth rate.
He also points out that renters in these more affordable locations often have fewer alternatives and less flexibility to absorb rent increases, which can exacerbate affordability challenges. This situation underscores the importance of monitoring local market conditions closely and understanding tenant needs in different regions.
What this means for landlords
For landlords, the current rental market landscape suggests both opportunities and challenges. Those with properties in more affordable areas may benefit from stronger rent growth, potentially improving rental yields. However, they should also be mindful of tenant affordability and the risk of increased turnover if rents rise too quickly.
In higher-cost urban centres where rents are flat or declining, landlords may need to consider strategies to maintain occupancy and tenant satisfaction, such as property improvements or flexible tenancy terms. Across all regions, the ongoing supply shortage means that well-maintained, competitively priced rental properties are likely to remain in demand.
What TLA members should consider
- Review and adjust rental pricing regularly to reflect local market conditions, particularly in more affordable areas experiencing rapid rent increases.
- Maintain properties to a high standard to attract and retain tenants amid competitive supply constraints.
- Monitor tenant affordability carefully to balance rent increases with tenant retention and minimise void periods.
- Stay informed about regional rental market trends through reliable sources such as Zoopla’s Rental Market Report and TLA resources.
- Consider flexible tenancy options or incentives in higher-cost areas where rent growth is subdued or declining.
- Ensure compliance with relevant legislation, including the Renters’ Rights Act 2026, to avoid legal risks and support positive landlord-tenant relationships.
TLA Training Academy
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Landlords can explore the Academy here: https://landlordassociation.org.uk/tla-academy/
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TLA update
The Landlord Association is continuing to expand its support, resources and partner network for landlords, tenants, agents and property professionals across the UK. Service providers interested in working with TLA can register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/
Source: www.property118.com
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