The relentless surge in UK rental prices finally paused at the end of 2025, offering a glimmer of relief for tenants in a market that is becoming more balanced, according to new data from property portal Rightmove.
A Quarterly Decline in Asking Rents
Rightmove's figures reveal that advertised rents across Britain fell between October and December 2025 compared to the previous three months. This marks only the second quarterly drop in the past five years, signalling a significant shift in market dynamics. The average monthly asking rent outside of London decreased by £15 (1.1%) to £1,370 in the fourth quarter, down from £1,385 in the third quarter.
Within the capital, the trend was similar. Average advertised rents in London fell by 0.7%, or £20, quarter-on-quarter, bringing the typical monthly asking price to £2,716. Despite this recent dip, rents remain higher than a year ago across the country, highlighting the cumulative pressure tenants have faced.
Annual Growth Slows to Multi-Year Low
While still above 2024 levels, the pace of annual rental growth has slowed markedly. Outside London, asking rents were 2.2% (£29) higher annually, representing the slowest year-end growth rate since 2018. In London, the annual increase was a modest 0.8%, the lowest since 2020 when rents fell during the pandemic.
Rightmove attributes this moderation to a much-improved balance between supply and demand compared to the frenetic post-pandemic years. The portal predicts average advertised rents will rise by a further 2% over the course of 2026, a more measured pace than seen in recent history.
Expert Views on a More Settled Market
Colleen Babcock, a property expert at Rightmove, commented on the changing landscape. "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," she said. Babcock added that renters are now likely to experience a "much more settled and balanced market" with greater availability and less frenetic competition.
Industry professionals echoed this sentiment while noting ongoing challenges. Sarah Leslie, a lettings manager, observed that demand remains strong for well-located homes with outdoor space and good transport links. Christina Harris, a director at Cheffins, pointed to affordability issues, noting that in cities like Cambridge, average rents were "simply out of reach for some." She warned that a consistent shortage of quality properties would continue to exert upward pressure on prices.
Aneisha Beveridge, head of research at Hamptons, provided further context: "Rental growth slowed noticeably through much of 2025 as the market began to rebalance." She explained that falling mortgage rates have allowed some renters to buy, while stretched affordability has led others to stay with family longer, collectively easing the intense competition that characterised 2022-2024.
