Rents Decline Across Great Britain for the First Time

Rents in Great Britain ended 2025 lower than at the start of the year, marking the first full calendar year decline since Hamptons began tracking the lettings market in 2011. Newly agreed rents dropped by 0.7%, with the average tenant paying £1,371 per month—£10 less than the previous year for the same property. This decline initially centred on London but gradually spread to other regions, with five out of 11 monitored areas recording annual rent decreases by December 2025, compared to none in the previous year.

Aneisha Beveridge, head of research at Hamptons, explained: “On paper, 2025 looked like a good year for tenants. Rents on new lets ended 2025 lower than they started, and tenants had more choice than before.” However, she emphasised that falling rents were primarily driven by strong first-time buyer numbers and broader economic weakness, rather than improved tenant affordability. Beveridge added that fewer tenants are entering the rental market initially, with many staying at home longer and hesitant to commit to rental costs.

Impact of the Renters’ Rights Act on the Market

Beveridge also noted potential inflationary effects on agreed rents due to the implementation of the Renters’ Rights Act. She warned that if landlords find the legal and procedural framework of the new rules inadequate, it could gradually reduce the supply of rental homes. This regulatory uncertainty may contribute to landlords’ cautious approach to investment.

Landlord Investment Continues to Decline

Landlord investment in property purchases fell to 10.9% in 2025, down from 12% in 2024 and significantly below the 15.8% share recorded a decade earlier. This represents the lowest proportion of investor purchases since records began in 2012 and coincides with the first full year of the 5% higher stamp duty surcharge on additional properties.

Regionally, the North East remained the most investor-heavy market, with landlords responsible for 29% of acquisitions. The East Midlands and West Midlands followed, each accounting for around 15% of purchases. While northern England still dominates buy-to-let acquisitions, falling interest rates have shifted some investor focus towards southern regions. The South East, East of England, and North East were the only English regions to see a year-on-year increase in the proportion of homes bought by investors.

London Experiences the Sharpest Rent Reductions

London saw the steepest fall in newly agreed rents at 2.7%, equating to a £63 monthly decrease. Rents in the capital have reverted to levels last seen in June 2023. Other regions with rent declines included the South East (-1%), Yorkshire and Humber (-1.4%), Wales (-0.8%), and the East Midlands (-0.2%). Meanwhile, the East of England, South West, and Scotland recorded annual rent increases below 1%, with trends suggesting these areas could also see rents fall in early 2026.

Tenant Demand and Stock Availability

Tenant choice improved in 2025, with rented home availability rising by 6% compared to December 2024, reaching just 8% below pre-pandemic levels. This contrasts with the post-Covid period when stock was 52% below 2019 volumes amid rapidly rising rents. The recent increase in available properties reflects weaker renter demand rather than a surge in new landlord purchases.

While new lets cooled, existing tenants faced higher renewal costs. The average renewal rent rose by 3.3% annually to £1,310, narrowing the gap between new and renewed contracts to £61—the smallest difference since mid-2021 and a significant drop from the £170 peak seen in October 2023.

What This Means for Landlords and Agents

The combination of falling rents and reduced landlord investment signals a more cautious market environment. Landlords may face increased regulatory challenges and a smaller pool of prospective tenants entering the rental market. Letting agents should prepare for a softer lettings market with greater tenant choice and potentially longer void periods. Monitoring regional variations will be crucial, as some areas continue to experience rent growth while others see declines.

Suggested internal link anchors
– UK rental market trends
– landlord investment
– Renters’ Rights Act
– buy-to-let market
– tenant demand
– rent renewals
– regional rent variations
– London rental market
– property investment trends
– rental property availability
– letting agents market update
– tenant affordability

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/