The average advertised rent outside London fell by 1.1% in the final quarter of 2025, dropping £15 to £1,370 a month, Rightmove reveals.
The property platform adds that this marks only the second quarterly fall in five years.
Across the whole of last year, rents outside the capital climbed 2.2% compared with 2024, the slowest annual rise since 2018.
London followed a similar pattern with rents falling 0.7% in the last three months of the year, leaving the average at £2,716.
Annual growth in the capital came in at 0.8%, the weakest since 2020 when prices dropped during the pandemic.
Landlords will use cheap BTL loans
Colleen Babcock, a property expert at Rightmove, said: "There is still a long-term shortage of available rental homes, but it looks like landlords are taking advantage of cheaper available mortgage rates, and more available homes will benefit tenants.
"Existing tenants or those looking to rent their own home for the first time are likely to experience a much more settled and balanced market than a few years ago, when the competition to secure a home was frenetic."
She added: "There is much greater availability of homes, and fewer tenants to compete with now, which should hopefully make the experience more positive for renters."
Rightmove is predicting that average rents will grow by 2% this year as property supply and tenant demand become balanced.
Regional rent differences
Regional differences saw rents in the North East recording the smallest rise at 0.4%, while the North West saw the biggest jump at 3.6%.
Yorkshire and the Humber followed closely with 3.1%.
Competition among tenants has also eased and last year saw an average of 10 enquiries for each available property.
That's down from 14 in 2024 but still above the six seen in 2019 before the pandemic.
London averaged seven enquiries per listing in 2025, while the North West and Scotland saw 16.
The total number of homes on the rental market now stands 9% higher than a year ago.
However, supply remains a third lower than 10 years earlier, underlining the ongoing shortage.
Falling BTL mortgage costs
Rightmove also points to fresh figures from UK Finance, covering activity up to October, which highlight brighter prospects for landlords.
New buy to let mortgages rose 13% compared with the same period in 2024, while remortgages jumped 23%.
The data shows that there's both fresh investment and existing landlords are deciding to stay in the market, the strongest picture since 2022.
They are being helped by falling BTL mortgage costs and Rightmove's daily tracker shows the typical two-year BTL rate for a buyer with a 25% deposit is now 4.84%, down from 5.51% a year earlier.
Rents could continue rising
Sarah Leslie, a lettings manager at Jackson-Stops Sevenoaks, said: "Tenants are increasingly focused on value for money.
"Pricing accuracy is now critical to maintaining momentum.
"Homes that are realistically priced for current market conditions are continuing to let well, while those that are over-priced are taking longer to secure tenants."
Christina Harris, a director at Cheffins, said: "Rental prices have been growing at pace, however, the slowdown in growth last year was partly caused by uncertainty in the lead up to the Budget and the release of the details of the Renters' Rights Act.
"Supply remains far behind where it needs to be.
"The consistent shortage of good quality, well-presented rental properties will no doubt put upward pressure on rents in the coming months."
Student accommodation in 2026
Simon Thompson, the managing director of Accommodation for Students, said: "For student landlords, the 2025 rental market data paint a picture of cautious optimism.
"Annual rent growth hit its lowest level in years, supply increased and tenant competition in the wider PRS cooled compared with the post-pandemic frenzy."
He added: "There's a lot that can happen to the student accommodation sector this year, but lower mortgage rates might encourage investment, especially in high-demand student cities.
"Student tenant demand will remain strong and, inevitably, rents will rise as landlords face ever-increasing costs to run their business."
