UK rents are rising at their fastest pace in more than a year and are expected to accelerate further, according to Zoopla’s latest rental market report, reported by Property Reporter. Rents rose 2.6% in the 12 months to July 2026, up from a low of 1.6% in February, taking the average rent to £1,340 a month. Zoopla expects annual rental growth to reach 4% to 5% by the end of the year.
The number of homes available to rent began falling in May 2026, ending a three-year recovery in rental supply that had helped slow rent rises through 2024 and 2025. There are now 3% fewer homes for rent across the UK than a year ago, and new rental supply fell 6% in August alone. Demand has built at the same time: Zoopla said higher mortgage rates since the start of the year have kept more would-be first-time buyers renting for longer, pushing enquiries per rental listing to 5.3, the highest in almost two years and 6% above the same point in 2025.
Zoopla said supply scarcity, rather than regulation, is the main driver, noting that Scotland shows the same pattern of fewer rental homes and faster rent growth even though the Renters’ Rights Act does not apply there.
London faces the sharpest squeeze. Rental growth in the capital rose to 2.9% from 1.7% a year ago. Zoopla calculated that the average London buyer now needs an extra £35,500 in deposit to keep mortgage payments at January levels, against £18,200 nationally, based on a 75% loan-to-value mortgage over 27 years with five-year fixed rates rising from 4% to 4.8%. Across inner London postcode areas, the number of homes for rent has fallen 13% and rental growth is running at 3% to 4%.
Areas with average rents below £750 a month are seeing growth of about 5.4%, roughly double the national rate, with Dumfries (+11.3%) and Carlisle (+8.8%) leading postal areas. Wales has recorded the sharpest slowdown in rental growth, linked to a 7% increase in homes available to rent.
“Low levels of new investment by landlords and renters renting for longer mean we expect UK rents to increase by 4–5 per cent by the end of the year,” said Richard Donnell, executive director at Zoopla.
References
Property Reporter – UK rents on track for 4-5% growth as rental supply shrinks: Zoopla
