The average monthly private rent across the UK climbed by 8.1% to £1,326 in
the year ending February 2025, the Office for National Statistics (ONS)
reports.
However, the rise marks a slight slowdown from the 8.7% increase seen in
the 12 months to January. England’s renters saw their
average rent costs rise
by 8.3% to £1,381, in Wales rents grew by 8.5% to £785 and in Scotland by
5.8% to £998 over the same period.
Northern Ireland’s rents, which are measured to December 2024, experienced
an 8.1% increase, bringing its average to £832.
Bill creates uncertainty for landlords
The head of UK residential research at Knight Frank, Tom Bill, said: “The
Renters’ Rights Bill creates uncertainty for landlords which may put
upwards pressure on rents at a time when they are starting to come down
from the highs of recent years.
“A piece of legislation intended to make life easier for tenants may
inadvertently have the opposite effect if the supply of rental properties
tightens.”
His view was echoed by Nathan Emerson, the chief executive of Propertymark,
who said: “With there being a decreased focus on the supply of new rental
properties in the UK government’s Renters’ Rights Bill, it sadly comes as
little surprise that rents continue to increase.
“However, there are reasons to believe that they have not increased at the
rate they have done in previous years. For example, recent data has found
that annual rent inflation for new lets is running at its lowest level for
3.5 years.”
London has the highest rents
Within England, London emerged as the hotspot for rental inflation, with a
9.9% annual jump in the 12 months to February – down from 11% the previous
month and a peak of 11.5% in November 2024.
In contrast, the smallest increase at 4.8% was recorded in Yorkshire and
the Humber which is a drop from 5.2% in January.
London’s tenants saw the highest average rent at £2,235, while the North
East offered the most affordable at £715.
It will come as no surprise to learn that Kensington and Chelsea in London
racked up the highest rent bill with an average of £3,643.
The cheapest rent can be found in Dumfries and Galloway in Scotland at
£526.
Outside of London, the most expensive rent is in Elmbridge in the South
East with an average of £1,882.
The ONS data
also shows the variation in rents paid by property type.
It reveals that detached homes are fetching £1,517 monthly and flats or
maisonettes are averaging £1,301.
Larger properties with four or more bedrooms are £1,989, while one-bedroom
homes were the cheapest at £1,074.
Rising rents are a reality
Alex Upton, the managing director of specialist mortgages at Hampshire
Trust Bank, said: “Rising rents have become a reality for tenants, driven
by a fundamental shortage of rental homes.
“However, there are signs of change. Zoopla’s latest rental market report
shows the number of renters competing for each available property has
dropped to 12.
“It’s still high, but an improvement on recent years.”
He added: “This easing in demand may be contributing to a slowdown in
rental growth, with Zoopla reporting the lowest level of increases in over
three years.”
UK house prices also rise
Meanwhile, the ONS is reporting an increase in the UK’s house prices, which
rose by 4.9% to £269,000 in the year to January 2025.
That’s good news for student landlords looking for capital gains and it’s
up from the 4.6% growth seen in December 2024.
England’s average house price reached £291,000 (up 4.8%), Wales hit
£210,000 (up 6%), and Scotland stood at £187,000 (up 4.6%). Northern
Ireland’s figures, covering October to December 2024, showed a 9% rise to
£183,000.
Student landlords should consider the data
The managing director of Accommodation for Students, Simon Thompson, said:
“With private rents soaring by 8.1% to £1,326 and house prices climbing
4.9% to £269,000, the property market remains a fertile ground for
investment.
“That is particularly true in high-demand areas like London, where rents
leapt by 9.9%.”
He added: “Student landlords will need to take these numbers into account
and in slower growth regions, there might be a need for strategic focus.
“While the numbers for the south impress, the best student accommodation
investments are in those university cities with high tenant demand so
striking a balance should deliver renting investment success.”
