Private rents across the UK continued to rise at the start of 2026, though the pace of growth has eased compared to late last year. Office for National Statistics data show average rents increased 3.5% annually to £1,367 in January, down from 4% the previous month. House price growth also moderated, with average UK values rising 2.4% year on year to £270,000. Performance varied significantly across regions, with stronger growth recorded outside London.
- England’s average rent reached 3% growth, while Wales recorded the strongest 5.8%
- Scotland’s rents rose 2.6% and Northern Ireland saw a 5.6% increase
- The North East recorded the fastest rental growth in England at 8.0%, while London saw 1.1%
- London house prices recorded a 1.2% year-on-year decline, while Northern Ireland saw 7.5% growth
Original article source: Property118
There is a significant difference in disposition within the latest housing data – a cooling from the sharp accelerations seen in recent years.
Rental growth remains firmly positive. The deceleration from 4% simply represents a market that is moving back toward steadier, more sustainable levels of growth. After the extraordinary pressures of the post-pandemic period, moderation is a sign of rebalancing.
Importantly, supply constraints have not disappeared. Industry voices continue to highlight regulatory pressure, tax burdens and landlord confidence as key variables. Even modest reductions in rental stock can quickly translate into renewed upward pressure on rents, particularly in undersupplied markets.
The North East posting 8% rental growth, alongside strong house price growth in Northern Ireland, Wales and Scotland, strengthens a longer-term redistribution of momentum away from London. The capital’s softer rental and price performance convey affordability ceilings rather than structural weakness.
London remains a global city with deep liquidity and long-term demand drivers. Regional markets are currently offering strong growth trajectories and attractive yield profiles. The data supports a strategy that balances capital stability with regional income strength.
On the sales side, house price growth at 2.4% suggests stability. The modest slowdown from 2.8% indicates sensitivity to affordability and borrowing costs, yet there is no evidence of sharp correction. Outside London, price growth remains resilient, particularly in Northern Ireland where annual gains reached 7.5%.
Slower rental growth also coincides with improved conditions for first-time buyers, partly driven by better mortgage availability and reduced migration pressures. This leads to a housing market adjusting organically rather than under stress.
In practical terms, this is what a developing market looks like.Growth continues. Regional performance varies. Supply remains constrained. Demand adapts.
These conditions favour disciplined acquisition, regional diversification and close attention to policy developments – particularly with the Renters’ Rights Act approaching implementation.
