The cost of renting a home in the continues to rise, with average private rents increasing by 8.1% to £1,326 in the 12 months to February 2025, according to provisional estimates from the Office for National Statistics (ONS).
While the annual growth rate slowed slightly from 8.7% in January, renters across the country are still facing significant price increases.
Regional disparities remained evident, with England seeing the highest average rent at £1,381, marking an 8.3% increase.
Wales experienced an 8.5% rise, bringing average rents to £785, while Scotland recorded a more modest increase of 5.8% to £998.
In Northern Ireland, where data is available up to December 2024, rents rose by 8.1% to £832.
London continued to lead the way in rental inflation, with prices surging by 9.9% over the past year, the highest rate of any region in England.
In contrast, Yorkshire and The Humber experienced the slowest rental growth at 4.8%, offering some relief for tenants in that area.
Alongside rising rents, the housing market has also seen steady growth.
Average house prices increased by 4.9% to £269,000 in the 12 months to January 2025, up from a 4.6% growth rate in December 2024.
In England, house prices climbed 4.8% to £291,000, while Wales saw the highest growth rate among the nations at 6.0%, bringing average prices to £210,000. Scotland recorded a 4.6% increase, reaching an average price of £187,000.
Reaction:
Nathan Emerson, CEO of Propertymark:
“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.
“Propertymark recognises that the UK Government’s aim is to safeguard renters and give them greater security.
“However, an unintended consequence of continued legislation placed on landlords is a real concern echoed across the industry as overly prohibitive regulations will likely contribute to a reduced supply of rental homes, an increase in rent prices, and make it harder for people to find affordable housing.”
Alex Upton, managing director – specialist mortgages and bridging, Hampshire Trust Bank:
“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. 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.
“The elephant in the room is the Renters’ Rights Bill. While the legislation is designed to improve standards, which we fully support, there are concerns that it may reduce rental stock, at least in the short term. That could put upward pressure on rents again.
“But change also brings opportunity. Professional landlords with a long-term mindset are already adapting, shifting their focus to properties that maximise rental yields.
“Brokers and lenders will need to do the same to support these evolving strategies. If they do, the real winners will be tenants, benefiting from a broader selection of high-quality rental homes in the future.”
Nick Leeming, chairman of Jackson-Stops:
“The year started strong, driven by the looming Stamp Duty deadline and a post-Christmas reassessment of lifestyle priorities.
“This is reflected in our data, with 59% of branches reporting increased buyer interest in the past month.
“House prices are shaped by supply and demand. While Stamp Duty incentives are ending, the fundamental issue remains—a nationwide shortage of homes.
“Labour is committed to increasing supply, but until those homes materialise, price growth is likely to continue.
“Meanwhile, the maturing of 1.8 million fixed-rate mortgage deals in 2025 will prompt more households to reassess their options, further driving demand.
“As the Spring bounce approaches, we expect house prices to hold steady through the first half of the year.”
Tim Parkes, CEO of RAW Capital Partners:
“House prices continue to report positive annual growth, and this very much aligns with the market sentiment we are witnessing on the ground.
“Momentum built towards the end of last year, and activity levels have surged in early 2025.
“Despite next week’s changes to Stamp Duty thresholds, there’s still optimism that the market will continue perform well throughout the spring and summer months.
“Largely, this confidence stems from the Bank of England’s rate cutting cycle. While rates were held at last week’s meeting, markets anticipate at least two cuts before the year’s end, potentially bringing the base rate down to 4.0%.
“The economic data the Chancellor will be revealing later today from the Office for Budget Responsibility (OBR) – announced alongside the Spring Statement – will provide some important clues as to whether the Bank has the scope to proceed with these cuts.
“Regardless of what decision comes next, the sector is actively finding ways to facilitate investment, and today’s positive house price data should provide further encouragement. Lenders and brokers must now work together to ensure investors can access the finance they need to sustain this momentum into Q2 and beyond.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“The early months of 2025 have been characterised by a surge in activity as buyers and sellers alike looked to finalise transactions ahead of the Stamp Duty changes.
“This has driven a notable uptick in market momentum, with buyer demand, sales agreed, and new listings all showing positive year-on-year growth.
While we may see a period of adjustment as the market absorbs the tax increase, improving mortgage rates and continued earnings growth are providing a solid foundation for sustained price stability.
“The outlook remains cautiously optimistic, particularly with the potential for further government support in the Spring Budget.
“London and other high-value regions, in particular, are set to benefit from improved affordability, and we anticipate steady, modest price growth through the year.
“Despite ongoing economic headwinds, the housing market continues to demonstrate resilience, and we expect strong levels of sales activity to persist in 2025.”
