Private rental prices across the UK have held steady with a 3.5% annual increase to February, while house price growth has slowed, according to the latest data from the Office for National Statistics (ONS). This signals a cautious market environment for landlords and agents as rental demand remains firm despite subdued property price rises.

Rental growth remains steady

The ONS reports that private rents increased by 3.5% in the 12 months to February 2026, leaving the average monthly rent in the UK at £1,374. This rate is unchanged from January and represents one of the lowest annual rental growth rates since March 2022.

Breaking down the figures by region, England’s average rent now stands at £1,430, up 3.6% year-on-year. Wales saw a more significant rise of 5.5%, with average rents reaching £828. Scotland’s rents increased by 2.4% to £1,022, while Northern Ireland experienced a 5.2% rise to £875 in the 12 months to December 2025.

House price growth slows

Alongside rental trends, house prices across the UK have shown a modest increase of 1.3% in the 12 months to January 2026, reaching an average value of £268,000. This is a slowdown from the 1.9% growth recorded in December 2025.

Regionally, England’s average house price rose by £3,000 to £290,000, equating to a 1.1% increase. Wales saw prices grow by £4,000 to £210,000, although annual growth halved from 4.5% to 2.0%. Scotland’s average price increased by £3,000 to £188,000, while Northern Ireland recorded the strongest growth with a 7.5% rise to £196,000 in the final quarter of 2025.

Industry perspectives on market pressures

Tom Bill, head of UK residential research at Knight Frank, highlighted the potential for increased rental pressures this year due to upcoming legislative changes. He noted, “We expect upwards pressure on rents to intensify this year due to the arrival of the Renters’ Rights Act in May.”

Bill explained that additional challenges around setting rents and regaining possession could encourage some landlords to sell properties, tightening supply and placing financial strain on tenants. He also pointed out that London, where renting is more prevalent and demand remains high, may feel these effects more acutely. Furthermore, he warned that stricter environmental regulations in the future could worsen the supply-demand imbalance for both landlords and tenants.

Jeremy Leaf, a north London estate agent and former RICS residential chairman, observed a continuing shortage of rental stock, particularly as landlords sell properties at tenancy end due to concerns over forthcoming tax and regulatory changes. “This lack of stock and choice for tenants is supporting higher rents,” he said. However, Leaf also noted emerging tenant resistance to rent increases amid growing cost-of-living worries linked to geopolitical tensions in the Middle East.

Nathan Emerson, CEO of Propertymark, emphasised the ongoing supply-demand imbalance in the private rented sector. “Rents have risen year on year, and across many regions of the UK, there remains a chronic imbalance between supply and demand in the private rented sector, with far too few homes available to meet tenant need,” he said. Emerson also highlighted affordability challenges and the increasing legislative and environmental compliance burdens facing landlords.

What this means for landlords

For landlords and agents, the current market conditions suggest a cautious approach to rent setting and property management. While rental growth remains moderate, the potential impact of new legislation such as the Renters’ Rights Act may increase operational complexities and affect landlord willingness to retain properties in the market.

Supply constraints, particularly in London and other high-demand areas, continue to support rental values but may also lead to heightened tenant sensitivity to rent rises amid economic uncertainties. Landlords should prepare for evolving regulatory requirements and consider how environmental compliance may affect their portfolios in the coming years.

Overall, maintaining a balance between meeting tenant needs and managing regulatory demands will be crucial as the sector navigates these challenges.

Source: Based on reporting from Property118

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