According to Office for National Statistics (ONS) data, this was also lower than the 9.2% peak in rental price growth recorded in March last year.
Annual rent inflation in England was at 8.8%, coming to an average of £1,375 per month – lower than the 9.2% rise recorded in December. This was also lower than the record-high 9.3% rent increase seen in November.
In Wales, average monthly rent was 8.4% up since last year at £780. Again, this growth was lower than December’s 8.5% increase and down on the peak of 9.8% in November 2023.
Average monthly rent in Scotland was £995 in January, 6.2% higher than the year before. Compared to December, this was lower than the annual inflation rate of 6.9% that month and down on the 11.3% record high in August 2023.
Data for Northern Ireland was only available up to November 2024, with an 8.3% annual rise.
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In England, private rents rose the most in London with an 11% jump to £2,227, while the lowest was in Yorkshire and the Humber, with a 5.3% increase.
The lowest rent in England was found in the North East, which averaged £710 per month.
Rental market stuck in supply-demand imbalance
Richard Donnell, executive director at Zoopla, said: “The rental market continues to be stuck in a supply-demand imbalance, which is keeping an upward pressure on rents. Zoopla data shows there are 22% more homes for rent than a year ago, but availability remains below the pre-pandemic period. The ONS rental index tracks the value of all rented homes and remains high at 8.7% as the recent rapid growth in rents impacts the market.
“Zoopla’s latest index for new lets shows rents have slowed to 4%, down from 8% a year ago. Rental growth has slowed more rapidly in London, down to less than 2% for new lettings. The pace at which rents rise across all existing rented homes is slower and reflected in the ONS index, which shows how rents are realigning across the wider market. Once this has worked through the market, the ONS will also register slower rent inflation.”
Alex Upton, managing director for specialist mortgages and bridging at Hampshire Trust Bank (HTB), also said the rental market was still under “significant pressure, with demand continuing to outstrip supply”.
She added: “Letting agents are managing multiple applicants for every available property, and while stock levels have seen some movement, competition remains fierce. Until supply and demand move closer to balance, rental prices will keep climbing.
“But addressing this isn’t just about building more homes. The greater opportunity right now is in making better use of existing housing stock. Investors are focusing on refurbishment and conversion – revitalising underused properties and bringing them back into the rental market. This isn’t just a short-term fix; it’s an essential part of increasing supply in a meaningful way.
“For this to happen at scale, lenders must step up. Investors need financial support that enables them to move quickly, alongside planning frameworks that support these projects rather than slow them down. Without that, pressure on tenants and landlords alike will only intensify.”
