Renting costs fall for first time in 15 years: where prices are still rising
The cost of a typical new let in Great Britain increased by more than 25% over the last five years, according to Hamptons research.
But 2025 bucked the trend, with the average cost of rent falling slightly. So what has caused the dip, and will the downward trend continue in 2026?
Here, Which? looks what is happening to rental costs across different parts of Great Britain, explains why prices have stabilised and sets out the changes to the rental sector due to come into force from May.
Cost of a new rental falls by almost 1%
The typical cost of rent for a newly agreed let in Great Britain fell by 0.7% over the past year, according to the latest Hamptons Lettings Index.
This is significant. Hamptons has never previously recorded a fall in the cost of a new let since it launched the index in 2011.
It also marks a clear shift from the pandemic years, when rents rose sharply. In 2021 and 2022, Hamptons recorded annual increases of more than 9%, followed by a further rise of 7.1% in 2023.
- Find out more: questions to ask when renting a home
Are rents falling everywhere in Great Britain?
In some parts of Great Britain, the cost of a new let is still rising.
The largest year-on-year increase was in the North West, where rents rose by 2.5%, while inner London recorded the biggest annual fall, with prices down 3.7%.
A different trend appears for renewals. Tenants typically continue to see their rent increase when they renew, with only outer London recording a year-on-year decline.
The table below shows the annual change in rental costs across different regions of Great Britain.
| Inner London | £2,754 | -3.7% | £2,803 | 2.3% |
| Outer London | £1,956 | -1.6% | £1,875 | -0.5% |
| East of England | £1,255 | 0.5% | £1,248 | 4.4% |
| South East | £1,456 | -1% | £1,388 | 5% |
| South West | £1,262 | 0.7% | £1,155 | 3.1% |
| East Midlands | £982 | -0.2% | £928 | 4.9% |
| West Midlands | £1,085 | 2.1% | £1,002 | 5.1% |
| North East | £851 | 2% | £767 | 3.6% |
| North West | £1,034 | 2.5% | £914 | 6.5% |
| Yorkshire & The Humber | £923 | -1.4% | £890 | 3.6% |
| Wales | £870 | -0.8% | £821 | 4.1% |
| Scotland | £1,030 | 0.5% | £897 | 5.4% |
| Great Britain | £1,371 | -0.7% | £1,310 | 3.3% |
| Great Britain (Exc London) | £1,134 | 0.4% | £1,065 | 4.6% |
Source: Hamptons
- Find out more: renting a home: what you need to know
Why is the cost of rent falling?
After significant increases over the past five years, tenants will welcome signs that rent is stabilising. But what is behind the change?
Aneisha Beveridge, head of research at Hamptons, said falling rents were driven more by strong first-time buyer numbers and wider economic weakness than by improved affordability. She said fewer people are taking their first step into the rental market, with many staying at home for longer and being reluctant to commit to the cost of renting independently.
Beveridge also said upcoming legal changes could push advertised rents higher.
Under the Renters’ Rights Act, landlords will no longer be able to accept offers above the advertised price. This is likely to lead to higher asking rents, with more tenants offering below the headline figure instead. At least initially, she said, it is unlikely to affect the rents landlords actually achieve.
For tenants, this should make it clearer which properties they can afford, although advertised rents may rise in the short term.
- Find out more: tenancy agreements explained
What's happening to the price of a room?
The Hamptons Lettings Index provides insight into the cost of newly agreed rents, but a different picture emerges for renters looking for a room.
Data from SpareRoom shows that in the final three months of 2025, the steepest rent increases were in northern England, the Midlands and Scotland, particularly in towns and smaller cities.
In Bootle, Stourbridge, Keighley, Widnes and Carlisle, rents rose by more than 10% over the year. In Bootle, prices increased by 18%.
There was some relief for those searching for a room in London. The typical cost of renting a room in inner London fell slightly, down 0.9% over the year. However, the average monthly cost remains high at £985.
Matt Hutchinson, director at SpareRoom, said that easing rent growth should not be taken as a sign that renting has become more affordable.
In terms of affordability, too many renters are at breaking point, spending half their income on rent. The high cost of living is pushing people into traditionally more affordable areas and away from major cities which of course means these areas won’t be affordable for much longer.
What changes are coming in May 2026?
From May, the first elements of the Renters’ Rights Act are due to come into force, bringing a raft of changes to the private rented sector:
- Abolish section 21 ‘no-fault’ evictions: private landlords will no longer be able to use section 21 notices.
- Introduce assured periodic tenancies: tenants won’t sign fixed terms and can end the tenancy with two months’ notice; landlords must use section 8 grounds if they want to end it.
- Reform section 8 possession grounds: making it easier to evict tenants involved in antisocial behaviour or who are seriously and consistently behind on rent.
- Limit rent increases to once a year: landlords must give two months’ notice before any rise.
- Ban discrimination against tenants with children or those who receive benefits: landlords can’t refuse or deter applicants for these reasons.
- Require landlords to consider pet requests: they must respond within 28 days and provide a valid reason if they refuse.
- Strengthen enforcement: civil penalties will be expanded. The maximum penalty will be doubled and repeat offenders will be required to pay the maximum amount.
To find out about the changes that will be coming later in 2026 and beyond head to our full round up of the government's road map to implementing the Renters' Right Act.
