Rentals increase by 7%

Latest ONS data has shown that the average cost of monthly private rents increased by 7%, to £1,339, in the 12 months to May 2025 (provisional estimate); this annual growth rate is down from 7.4% in the 12 months to April 2025.

The data showed that average rents increased to £1,394 (7.1%) in England, £799 (8.5%) in Wales, and £999 (4.5%) in Scotland in the 12 months to May 2025. Average rents increased to £848 (7.7%) in Northern Ireland in the 12 months to March 2025.

Private rents annual inflation in England was highest in the North East (9.7%) and lowest in Yorkshire and The Humber (3.7%) in the 12 months to May 2025.

Separately, average UK house prices increased by 3.5%, to £265,000, in the 12 months to April 2025 (provisional estimate); this annual growth rate is down from 7.0% in the 12 months to March 2025. Average house prices increased to £286,000 (3%) in England, £210,000 (5.3%) in Wales, and £191,000 (5.8%) in Scotland in the 12 months to April 2025.

Sarah Coles, Head of Personal Finance at Hargreaves Lansdown said “Hope blossomed for renters in May, as rent rises slowed again. There are some signs of more balance returning to the market, with more properties up for rent and fewer tenants on the hunt for a home. There have even been some rent reductions from landlords who realised they’d been over-optimistic with pricing.

“This owes a great deal to how unaffordable rents have become. The fact rents have been rocketing for four years – well ahead of wages –  has pushed more renters out of the market. Fewer are able to leave the family home, more are returning to it, and some are stretching to a house purchase to get out of the rental cycle. Meanwhile, rising rents are helping to balance the books for landlords, so their exodus from the market is slowing.

“For those left in the rental market, smaller rent rises could bring some relief, but they will still be wrestling with the cumulative effect of such a long period of runaway rents. It’s no wonder they are worse off than homeowners on almost every measure. The HL Savings and Resilience Barometer shows that not only do they have very little cash left over at the end of the month, and not enough saved for a rainy day, but only 16% are on track for a moderate retirement income, so they could be paying the price for sky-high rents for the rest of their lives.”