UK rents rise 8.1% to £1,326 as London hits 9.9% inflation – ONS

The average monthly private rent across the UK climbed by 8.1% to £1,326 in the year ending February 2025, the Office for National Statistics (ONS) reports.

However, the rise marks a slight slowdown from the 8.7% increase seen in the 12 months to January. England’s renters saw their average rent costs rise by 8.3% to £1,381, in Wales rents grew by 8.5% to £785 and in Scotland by 5.8% to £998 over the same period.

Northern Ireland’s rents, which are measured to December 2024, experienced an 8.1% increase, bringing its average to £832.

Bill creates uncertainty for landlords

The head of UK residential research at Knight Frank, Tom Bill, said: “The Renters’ Rights Bill creates uncertainty for landlords which may put upwards pressure on rents at a time when they are starting to come down from the highs of recent years.

“A piece of legislation intended to make life easier for tenants may inadvertently have the opposite effect if the supply of rental properties tightens.”

His view was echoed by Nathan Emerson, the chief executive of Propertymark, who said: “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.”

London has the highest rents

Within England, London emerged as the hotspot for rental inflation, with a 9.9% annual jump in the 12 months to February - down from 11% the previous month and a peak of 11.5% in November 2024.

In contrast, the smallest increase at 4.8% was recorded in Yorkshire and the Humber which is a drop from 5.2% in January.

London’s tenants saw the highest average rent at £2,235, while the North East offered the most affordable at £715.

It will come as no surprise to learn that Kensington and Chelsea in London racked up the highest rent bill with an average of £3,643.

The cheapest rent can be found in Dumfries and Galloway in Scotland at £526.

Outside of London, the most expensive rent is in Elmbridge in the South East with an average of £1,882.

The ONS data also shows the variation in rents paid by property type.

It reveals that detached homes are fetching £1,517 monthly and flats or maisonettes are averaging £1,301.

Larger properties with four or more bedrooms are £1,989, while one-bedroom homes were the cheapest at £1,074.

Rising rents are a reality

Alex Upton, the managing director of specialist mortgages at Hampshire Trust Bank, said: "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."

He added: "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.”

UK house prices also rise

Meanwhile, the ONS is reporting an increase in the UK’s house prices, which rose by 4.9% to £269,000 in the year to January 2025.

That’s good news for student landlords looking for capital gains and it’s up from the 4.6% growth seen in December 2024.

England’s average house price reached £291,000 (up 4.8%), Wales hit £210,000 (up 6%), and Scotland stood at £187,000 (up 4.6%). Northern Ireland’s figures, covering October to December 2024, showed a 9% rise to £183,000.

Student landlords should consider the data

The managing director of Accommodation for Students, Simon Thompson, said: “With private rents soaring by 8.1% to £1,326 and house prices climbing 4.9% to £269,000, the property market remains a fertile ground for investment.

“That is particularly true in high-demand areas like London, where rents leapt by 9.9%.”

He added: “Student landlords will need to take these numbers into account and in slower growth regions, there might be a need for strategic focus.

“While the numbers for the south impress, the best student accommodation investments are in those university cities with high tenant demand so striking a balance should deliver renting investment success.”