The average monthly private rent rose by 7.7% to £1,332 in the 12 months to March 2025, according to provisional figures released by the Office for National Statistics (ONS).
While rents continue to climb, the latest data marks a slight slowdown from the annual growth rate of 8.1% recorded in the year to February 2025.
England recorded the highest average private rent at £1,386, representing an annual increase of 7.8%.
In Wales, average rents rose to £792, an 8.9% increase year-on-year.
Scotland saw a more modest rise of 5.7%, taking the average rent to £1,001.
Northern Ireland also experienced a notable rise, with average rents reaching £838 in the 12 months to January 2025, an annual increase of 8.2%.
In England, the highest rate of rental inflation was seen in the North East, where rents surged by 9.4% compared to the previous year.
In contrast, the lowest growth was recorded in Yorkshire and The Humber, where rents increased by 4.6%.
Alongside rising rents, house prices also continued their upward trend.
The average house price increased by 5.4% to £268,000 in the 12 months to February 2025.
This represents a further acceleration from the 4.8% growth recorded in the year to January 2025.
Breaking the figures down by nation, England saw average house prices rise to £292,000, a 5.3% annual increase.
In Wales, prices climbed to £207,000, up 4.1%, while in Scotland, the average house price increased by 5.7% to reach £186,000.
Reaction:
Tim Parkes, CEO of RAW Capital Partners:
“Today’s data underlines what a strong start to the year the property market had, with falling interest rates and the added motivation of completing deals before the higher stamp duty costs came into effect clearly working in tandem to boost demand.
“The question was always going to be whether this price growth could be sustained into the spring – and there’s certainly an argument to be made that the current global economic uncertainty might actually drive interest in property investment.
“President Trump’s tariffs have reshaped the financial landscape and the impact on stocks and shares has been well documented.
“Could this prompt a flight to stability? If so, as today’s figures demonstrate, the UK property market could be a beneficiary, with bricks and mortar investments holding their appeal.
“At the same time, expectations that the Bank of England may need to cut interest rates – particularly if a trade war translates into a global recession – are already feeding into falling mortgage rates.
“This should support affordability and encourage further activity, but it also highlights the complex environment in which the market is operating.
“As such, the onus is on specialist lenders to provide the speed, flexibility and expertise that borrowers and brokers will need in the coming months.
“Only then can we support the market and instil further confidence in bricks and mortar.”
Paresh Raja, CEO of Market Financial Solutions:
“This ONS data paints a more positive picture than Halifax’s house price index, which last week suggested that prices had fallen month-on-month in March (importantly, there was still healthy annual growth).
“It will be interesting to see if the ONS statistics also reflect a dip in prices in March, but either way, this is likely just the result of a slight recalibration after prices were driven up by particularly high buyer demand in January and February, as people sought to complete on property purchases before the stamp duty hike in April.
“The property market remains in a healthy place, albeit with economic turbulence being experienced around the world.
“For homebuyers and investors, all eyes will be on the Bank of England’s next base rate decision on 8th May.
“Will the Monetary Policy Committee (MPC) vote to cut rates amid recessionary pressures, or will it hold again amid all the uncertainty surrounding trade tariffs?
“This is the key question, and the Bank’s decision will likely be a key factor in determining how the property market goes on to perform through the spring and summer months.”
Darrell Walker, group sales director at Chetwood Bank for ModaMortgages and CHL Mortgages for Intermediaries:
“This is another useful marker for the property market’s early-year performance, but in reality, it is the current market trends that are far more important.
“House prices benefit from the rush of buyers wanting to beat the Stamp Duty deadline, not to mention the Bank of England reduced the base rate in February, but Q2 is shaping up to be a crucial period.
“The market must now adapt to the new Stamp Duty tax bills, while the Bank of England’s next rate decision in early May will be of particular interest to borrowers and brokers – not least because of the wider economic uncertainty that we have seen emerge in the wake of President Trump’s trade policies.
“This is why Q2 2025 will be a period that demands adaptability from lenders and brokers alike.
“Brokers will no doubt see some potential clients adopt a ‘wait and see approach’, while others will still seek out new opportunities.
“Different behaviours are indicative of people’s varying attitudes and demands – lenders must be more agile than ever in responding to these differing needs, offering tailored and flexible solutions that can meet the unique and shifting needs of individual borrowers and brokers in the coming months.”
Nick Leeming, chairman of Jackson-Stops:
“We saw steady house price growth in the early months of 2025, driven by increased buyer activity ahead of the Stamp Duty Land Tax changes in April.
“Global economic uncertainty is also playing a role, with more U.S. buyers turning to the UK for stability — particularly in markets like the Cotswolds, where we’re already seeing upward pressure on prices.
“While market volatility doesn’t directly determine sales, it does influence a buyer’s drive to purchase.
“Across the Jackson-Stops network, completions jumped in February and instructions rose 16% year-on-year — a clear sign of a strong pipeline as we head into the Spring bounce.
“With sub-5% mortgage rates still available, many buyers are feeling motivated to act.
“To support continued momentum in the market, it’s vital the Government delivers on its pledge to build 1.5 million homes by 2029.”
Alex Upton, managing director – specialist mortgages and bridging, Hampshire Trust Bank:
“The rental market remains under significant pressure, with demand continuing to outstrip supply.
“Letting agents are managing multiple applicants for every available property.
“While stock levels have seen some movement, competition remains fierce. Until that imbalance shifts, rental prices will continue to rise.
“At the same time, the Renters’ Rights Bill is adding uncertainty for landlords.
“Proposed changes such as the removal of Section 21 may prompt some smaller or more cautious landlords to exit the market altogether, further reducing already stretched rental stock.
“We are also seeing a shift. Professional landlords are reassessing their portfolios with a long-term view, targeting properties that deliver tenant appeal and resilient yields.
“Refurbishment is playing a bigger role, helping to reposition or upgrade underused assets and bring more quality homes back into circulation.
“To support this effectively, lenders need to step up. Refurbishment is not a one-size-fits-all exercise. It requires funding that is structured around the deal, not just the asset class.
“Without that kind of flexibility, unlocking supply at scale becomes far harder.”
Tomer Aboody, director of specialist lender MT Finance:
“As property prices rise, showing demand is high, we are also seeing the lowest sales volumes year on year for the past five years.
“Lower supply should always translate into higher prices, as buyers fight for the homes that are available.
“With the lack of a replacement for the stamp duty concession, inflicted by Rachel Reeves, we saw a final stampede towards the end of March, as buyers tried to close transactions before being hit with higher tax.
“Another reduction in interest rates has been discussed, which will help push volumes up, but in order to get back to levels from yesteryear, stamp duty has to be reduced.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“The dip in inflation to 2.6% is encouraging news as far as future interest rate movements are concerned, and if this downwards trend continues, it will make it easier for the Bank of England to cut rates again sooner rather than later.
“Another rate reduction would help boost affordability, and would be particularly timely now that the stamp duty concession has ended.
“On the mortgage front, a number of lenders have cut rates on the back of lower swap rates.
“The best deals aren’t hanging around for long, however, so borrowers who see a rate they like the look of would be wise to speak to a whole-of-market broker and reserve it in case mortgage rates do edge upwards again.”
Jason Tebb, president of OnTheMarket:
“Although historic, this data shows house prices continued to rise on an annual basis in February, with the average property price £13,000 higher than a year ago.
“Two interest rate reductions in the second half of last year and one so far this year have had a positive knock-on effect on confidence, which the housing market relies so heavily on.
“However, while the rate of inflation fell by more than expected last month from 2.8% to 2.6%, it is expected to rise again in April as tax changes and price hikes come into effect.
“This may impact the Bank of England’s plans with regard to the pace of further rate reductions as it keeps a close eye on inflationary pressures.
“Affordability remains a challenge but with a number of lenders reducing their mortgage pricing over the past few weeks, this may continue to ease if swap rates decline and other lenders follow suit.
“Cheaper mortgage rates would certainly help boost activity and transactions, which are of benefit not just to the housing market but wider economy.”
Nathan Emerson, CEO of Propertymark:
“Housing is one of the most fundamental elements that can help drive overall economic progress, so it is welcome news to witness further house price growth year-on-year as we progress into 2025, especially at a time when there is a growing concern as to how international policies may impact the wider UK economy moving forwards.
“However, there are wider reports suggesting reduced mortgage rates could be a realistic outcome from recent events.
“It remains positive to see people approach the buying and selling process with a strong degree of confidence, despite inflation not being below the Bank of England target level of 2% quite yet.
“We have seen an upbeat start to the year, and we remain optimistic this will continue into the traditionally busy spring and summer months.
“The rental sector continues to see sizable challenges from a magnitude of different angles currently.
“We continue to see a considerable mismatch between supply and demand with an average of 10 people wishing to rent each property currently available across the UK.
“In addition, we are seeing vast legislative changes that will affect how and if some landlords are able to continue operating within the sector.
“Throughout the last 20 years renting a property has become enormously more popular with people, and it’s vital there is targeted support and investment in the sector to keep pace with ever intensifying demand.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“Today’s ONS HPI figures, showing an increase in house prices, demonstrate the underlying resilience of the UK property market despite recent headwinds.
“While some might be surprised given the Stamp Duty changes implemented at the beginning of April, this data likely still reflects some momentum from transactions agreed in the lead up to the deadline.
“More importantly, it highlights a strong continuing appetite to move, buoyed significantly by increasingly competitive mortgage rates. Lenders are clearly anticipating potential Bank of England base rate cuts amidst global uncertainty, making borrowing more attractive and helping to offset the higher transaction costs for many buyers.
“Although supply remains high, demanding realistic pricing from sellers, this upward tick confirms that motivated buyers, armed with better mortgage deals, are actively competing for well-priced homes.”
Gareth Samples, CEO of The Property Franchise Group:
“Despite a backdrop of economic uncertainty and recent Stamp Duty changes, the latest ONS figures show a resilient housing market, with prices continuing to edge upwards.
“The push to complete purchases before the April Stamp Duty adjustment certainly played a role in buoying short-term demand, but it’s encouraging to see this momentum carry through.
“While the higher cost of buying will cause some to pause, falling mortgage rates and the possibility of Bank of England rate cuts in the month ahead will help keep demand stable.
“As ever, pricing strategy remains key – buyers have more choice than ever, and sellers must remain competitive to stand out.”
Kevin Roberts, managing director, mortgage services, L&G:
“The market is heading in a positive direction as we move into the busy spring period, but it’s still important that aspiring homeowners discuss their options with a professional adviser.
“With some lenders now offering rates below 4%, there’s a lot of competitive options to choose from. And while some buyers might have help from family, many don’t, which makes tailored professional advice even more valuable.
“Our broker data shows that activity is picking up, especially among first-time buyers, with a 45% increase in mortgage searches for this group in Q1.
“This year could see affordability improve further if the Bank of England cuts the base rate, as some expect.
“Lenders are already pricing in that possibility, which is good news for buyers and those looking to remortgage.”
Richard Harrison, head of mortgages at Atom bank:
“House price inflation has been buoyed in recent months by buyers desperately scrambling to get completions over the line before the stamp duty deadline.
“Figures from Propertymark show that the average number of viewings per available property rose in February to its highest level since last summer, as would-be purchasers looked to get the ball rolling on a transaction.
“That competition has put vendors in a good position to hike their asking price, as reflected in the ONS data.
“While the stamp duty deadline has now passed, I’m not sure we should expect to see much of an impact on house prices, particularly given the prospect of lower mortgage rates to come.
“Ongoing market turmoil has had an impact on base rate expectations, with some suggestions there could be as many as four further cuts this year, while today’s lower than expected inflation data strengthens the case for cuts to be made soon.
“We are already seeing lenders cutting rates, so even without the allure of a lower Stamp Duty bill, would-be buyers may feel more confident in pushing ahead with a purchase.
“Given the speed at which house prices have accelerated, a squeeze on household budgets and the lack of a replacement for schemes like Help to Buy, it’s more important than ever that buyers can access funding at high loan-to-values (LTVs).
“The lack of an enormous deposit should not be an insurmountable barrier for those more than able to service a mortgage.”
Jonathan Handford, managing director at national estate agent group Fine & Country:
“House prices edged up in February, likely reflecting a final flurry of demand as buyers raced to beat the Stamp Duty threshold changes coming into effect in April.
“With the first-time buyer relief threshold set to fall from £425,000 to £300,000, February became a key deadline for those trying to secure a purchase before facing steeper costs — pushing a wave of sales over the line and giving prices a temporary lift.
“March brought more economic signals that could shape the market ahead. The Bank of England held the base rate steady at 4.5%, while reports today reveal inflation dipped unexpectedly again to 2.6% — closer to the Government’s 2% target — offering some relief amid ongoing cost-of-living pressures.
“Looking ahead, global headwinds such as the latest US tariffs under Trump’s proposed trade plans could add strain to the broader economy. However, this could prompt the Bank of England to consider further rate cuts to keep growth on track.
“In the near term, while the February price bump may prove short-lived, there are signs of cautious optimism.
“A softer inflation outlook and potential rate reductions could support borrowing conditions — but affordability remains a hurdle, especially for those now facing a tighter Stamp Duty regime.”
