UK Rents Hit Record £1,343 as Growth Slows to 5.9% - ONS August 2025 Data

Private rents across the UK have reached a record average of £1,343 per month in July 2025, according to the latest Office for National Statistics (ONS) data released today. While this represents a 5.9% annual increase, the figure marks a notable deceleration from the 6.7% growth recorded in the 12 months to June, suggesting the rental market may be hitting an affordability ceiling.

Regional Variations Paint Complex Picture

The rental landscape shows significant regional disparities, with the North East experiencing the steepest rent inflation at 8.9%, while Yorkshire and the Humber recorded the most modest increase at 3.5%.

Key regional breakdown:

• Scotland: £999 average rent (3.6% annual increase)
• Northern Ireland: £855 average rent (7.4% increase to May)
• England: Continues to drive national averages with highest absolute rents

Market Dynamics Shifting Toward Balance

Industry data suggests the rental market is experiencing a fundamental rebalancing, with supply and demand dynamics showing encouraging signs for tenants:

Supply Side Improvements:

• Available rental homes increased 18% year-on-year
• New buy-to-let mortgage loans surged 32% in early 2025
• More properties entering the market as mortgage conditions improve

Demand Side Cooling:

• Tenant demand dropped 7% compared to March 2024
• Average enquiries per property fell from 16 to 12
• Competition remains double pre-pandemic levels

Industry Expert Analysis

Louisa Sedgwick, managing director of mortgages at Paragon Bank, commented: "Continued moderation of private rental growth is a positive sign but monthly payments remain at a level that will stretch many tenants. This is because rent inflation has swelled significantly from 1.0% in the first quarter of 2021 to a record high of 9.0% seen at the end of 2024."

Alex Upton, managing director of specialist mortgages at Hampshire Trust Bank, added: "Rents are still edging upwards, but there are signs that tenant demand has eased slightly over the summer. Propertymark's latest Housing Insight report shows new tenant registrations in June fell to their lowest level in years."

Broader Housing Market Context

The rental data coincides with broader housing market trends, as average UK house prices rose 3.7% to £269,000 in the 12 months to June. England's average property price reached £291,000, representing a 3.3% increase equivalent to a £9,000 rise.

Regional house price performance:

• Scotland: 5.9% increase to £192,000 (£11,000 gain)
• Wales: 2.6% rise to £210,000 (£6,000 increase)
• Northern Ireland: 5.5% increase to £185,000 (£10,000 addition)

Legislative Landscape Adding Uncertainty

The rental market continues to operate against a backdrop of significant legislative change, with the Renters' Rights Bill receiving its latest parliamentary update today (21 August 2025). The landmark legislation, which will abolish Section 21 'no-fault' evictions and introduce new tenant protections, continues its progression through Parliament.

Recent government amendments include:

• Prohibition on landlords demanding multiple months' rent in advance
• Introduction of a Private Rented Sector Ombudsman
• Enhanced protections for student tenants
• Expansion of Decent Homes Standard to private rentals

Market Outlook and Implications

The latest data suggests the UK rental market is entering a new phase characterized by:

For Tenants:

• Slightly improved choice as supply increases
• Continued affordability pressures despite slower growth
• Potential for more balanced negotiations

For Landlords:

• Need for strategic pricing as competition increases
• Regulatory compliance becoming increasingly critical
• Opportunities to attract quality tenants through competitive offerings

Affordability Crisis Persists

Despite the encouraging supply trends, affordability remains a critical issue. Rents have risen 40% since 2020 compared to just a 31% increase in wages, creating ongoing pressure on household budgets.

The ONS data shows monthly payments remain at levels that stretch many tenants, with the cumulative impact of four years of above-inflation rental growth continuing to affect lower and middle-income households disproportionately.

What's Next for the Market?

Industry forecasts suggest the rental market will continue to experience moderated growth through 2025, with predictions of 3-4% annual increases. However, several factors could influence this trajectory:

• Further legislative changes from the Renters' Rights Bill
• Continued improvements in mortgage market conditions
• Regional economic variations affecting local demand
• Potential policy responses to affordability concerns

As the market adapts to new supply-demand dynamics and regulatory frameworks, both landlords and tenants will need to navigate an evolving landscape that balances investment returns with housing accessibility.

The latest ONS data represents a critical milestone in the UK rental market's evolution, suggesting that while record rents persist, the trajectory toward a more balanced market may finally be underway.