Figures from the Office for National Statistics (ONS) revealed this was the joint-lowest annual growth rate for private rents since March 2022.
In cash terms, average monthly private rents were £47 more than a year ago.
Wales had the strongest rental growth rate across the UK, with a 5.5% or £43 annual rise to £828 per month. This was lower than the inflation rate of 5.8% last month and down from the recent peak of 8.9% in March 2025.
In Northern Ireland, average private rents rose 5.2% annually in December, or by £43, slower than the growth rate of 5.6% recorded in November. The ONS said rental growth in the country had been slowing since the record high rise of 9.9% in April 2024.
In England, the average private monthly rent was £1,430, a 3.6% or £49 increase on the year before. This was a higher growth rate than last month, where rents rose 3.5% annually, and the first increase across England since November 2024.
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The lowest rental growth was seen in Scotland, at 2.4% or £24 more than the year before, averaging £1,022 per month. The growth rate was down on the 2.6% inflation recorded the previous month and the lowest annual rise in over four years. The ONS said Scotland’s annual inflation rate had been slowing since the record-high increase of 11.7% in August 2023.
Larger homes attract the highest rental prices
In February, detached homes had the highest average monthly rent, at £1,567. Flats and maisonettes had the lowest average monthly rent at £1,342.
Rent was highest for properties with four or more bedrooms, at £2,046 per month, and lowest for properties with one bedroom, at £1,115.
Not enough homes for rental demand
Industry professionals said the rental supply imbalance was supporting higher rents, particularly as some landlords disposed of properties.
Nathan Emerson, CEO of Propertymark, said the “chronic imbalance” between supply and demand remained, with “far too few homes available to meet tenant need”.
Emerson said: “Affordability pressures persist, and Propertymark data shows that 17% of member agents have reported an increase in rental costs over this period.
“The operating environment for landlords continues to evolve at pace, with an expanding legislative burden and growing expectations around environmental compliance creating significant challenges.”
Jeremy Leaf, North London estate agent and a former Royal Institution of Chartered Suveyors (RICS) residential chair, said there was a “shortage of stock, particularly prompted by landlords selling as tenancies end, due to worries about imminent tax and regulatory issues”.
He added: “This lack of stock and choice for tenants is supporting higher rents.
“However, over the past few weeks, we have noticed some tenant resistance to paying more, bearing in mind increasing worries about the cost of living prompted by war in the Middle East.”
Alex Upton, managing director for specialist mortgages and bridging finance at Hampshire Trust Bank (HTB), said landlords were navigating a market where supply was constrained and confidence was under pressure.
She added: “Demand continues to outstrip available stock in many areas, but the more meaningful shift is in how investors are responding to a more complex and less predictable operating environment.”
Upton said some lenders were becoming “more selective” and were stepping back from parts of the market.
“When funding options narrow at the same time as regulatory and cost pressures increase, it creates a more challenging landscape for brokers and landlords to operate within,” she added.
Upton said landlords were “adjusting accordingly”, adding that expansion was no longer the default.
She said: “Many are reassessing exposure, refining portfolios and prioritising assets that offer stronger and more reliable income. More experienced investors are not stepping away, but they are being far more deliberate in how they allocate capital and structure their portfolios.
“These conditions are reshaping funding demand. Landlords are not simply refinancing, they are restructuring. That means releasing capital selectively, consolidating borrowing and repositioning portfolios to reflect tighter margins and higher compliance expectations. It requires lenders who can assess cases on their merits, take a long-term view and structure funding around how portfolios operate in practice.
“In this environment, consistency and clarity are not optional. Where funding remains accessible, decision-making is clear and lenders continue to engage with complexity, confidence holds. Where it does not, it falls away quickly. That is where the real risk sits. Without stability, pressure in the rental market does not ease, it builds.”
