The Hamptons Lettings Index showed that newly agreed rents fell by 0.7% over the year, averaging at £1,371 per month across Great Britain by December. This was £10 per month less than the same property a year earlier.
Rent declines spread beyond London
London set the trend for falling average rents, but as the year went on, Hamptons recorded more regions joining the capital. According to its analysis, which has pulled data from Connells Group since 2011, five out of 11 regions in Great Britain were seeing rental prices fall.
London had the largest declines, down 2.7% or £63 per month over the year, bringing rent costs back to where they were in June 2023.
By December, other regions joined the capital, with declines seen in the South East at 1%, the East Midlands at 0.2%, Yorkshire and the Humber at 1.4% and Wales at 0.8%.
Three regions saw rental growth slow and fall below 1%, suggesting that these areas could start to see declines this year. These were the East of England, with an annual growth of 0.5%, the South West at 0.7%, and Scotland at 0.5%.
The year ended with more rental stock than in December 2024, with a 6% boost. The number of homes available to rent was just 8% down on pre-pandemic levels. Hamptons said the rise in stock mostly pointed to weaker tenant demand rather than new landlord purchases.
Landlord activity slips
Landlords accounted for just 10.9% of property purchases in 2025, down from 12% in 2024. Hamptons said this was also significantly below the 15.8% high recorded in 2015, before the 3% stamp duty surcharge was first introduced in 2016.
This was the lowest share since Hamptons’ records began and the first time the share of landlord purchases dropped below 11% for a full calendar year. This decline follows the first full year since the stamp duty surcharge was increased to 5%.
The North East was the most attractive region for landlord investment, where landlords accounted for 29% of all purchases in the region. This was the highest share by a significant margin when compared to other regions.
In the East Midlands, landlords made up 15.1% of sales, while this was 15% in the West Midlands.
Investment interest seemed to return to Southern regions as mortgage rates fell and affordability improved, as the South East, East of England and North East were the only three regions of England to record a year-on-year increase in the share of homes bought by investors.
As for renewed contracts, there was a 3.3% rise in rents to £1,310 per month in Great Britain. This left a £61 gap between new lets and renewals, the smallest difference since July 2021 and down from the peak of £170 per month in October 2023.
|
Region |
New lets |
Renewals |
||
|
Average monthly rent |
YoY % |
Average monthly rent |
YoY % |
|
|
Greater London |
£2,294 |
-2.7% |
£2,268 |
0.9% |
|
Inner London |
£2,754 |
-3.7% |
£2,803 |
2.3% |
|
Outer London |
£1,956 |
-1.6% |
£1,875 |
-0.5% |
|
South |
£1,344 |
-0.2% |
£1,282 |
4.3% |
|
East of England |
£1,255 |
0.5% |
£1,248 |
4.4% |
|
South East |
£1,456 |
-1% |
£1,388 |
5% |
|
South West |
£1,262 |
0.7% |
£1,155 |
3.1% |
|
Midlands |
£1,037 |
1.1% |
£967 |
5% |
|
East Midlands |
£982 |
-0.2% |
£928 |
4.9% |
|
West Midlands |
£1,085 |
2.1% |
£1,002 |
5.1% |
|
North |
£965 |
1.1% |
£882 |
5% |
|
North East |
£851 |
2% |
£767 |
3.6% |
|
North West |
£1,034 |
2.5% |
£914 |
6.5% |
|
Yorkshire and the Humber |
£923 |
-1.4% |
£890 |
3.6% |
|
Wales |
£870 |
-0.8% |
£821 |
4.1% |
|
Scotland |
£1,030 |
0.5% |
£897 |
5.4% |
|
Great Britain |
£1,371 |
-0.7% |
£1,310 |
3.3% |
|
Great Britain (exc London) |
£1,134 |
0.4% |
£1,065 |
4.6% |
Fewer tenants enter the rental market
Aneisha Beveridge, head of research at Hamptons, said 2025 looked like a good year for tenants on paper, as rents fell over the year and stock levels rose.
She added: “However, falling rents were driven more by strong first-time buyer numbers and wider economic weakness than by improved tenant affordability. Fewer tenants are taking their first step into the rental market, with many staying at home longer and being reluctant to commit to the cost of renting a place of their own.
“2026 brings the implementation of the Renters’ Rights Act in May, which bans offers above the asking rent. This means that agreed rents and advertised rents may start to rise at different rates. The block on landlords accepting a price above what they asked for is likely to push up advertised rents, with more tenants making offers below the higher asking price instead. However, at least initially, it is unlikely to impact the values actually being achieved.”
Beveridge said it was possible that the introduction of the Renters’ Rights Act might prove inflationary for agreed rents at the back end of the year.
She added: “If landlords start to find the procedural and legal machinery underpinning the new rules lacking, it is likely to slowly squeeze rental homes out of the market. From a supply perspective, the lack of appetite means the share of homes bought by investors could fall below 2025’s already low levels.”
