Average private rents in Great Britain have fallen for the first time in five years, as lower mortgage rates help cool the rental sector, according to data from estate agent Hamptons. The average rent on a newly let property dropped by 0.2% year on year in July, marking the first annual decline since August 2020, during the height of the Covid pandemic.
The fall follows years of above-inflation rent increases driven by strong demand outstripping supply, pandemic-related shifts in living and working patterns, and buy-to-let landlords passing on higher interest costs. However, five interest rate cuts over the past year have reduced mortgage costs for some landlords, easing the need for further rent rises, while lower rates also make it easier for some tenants to consider buying a home, reducing rental demand.
Regional variations are significant. Greater London saw the steepest decline, with rents falling 3% year on year in July, the seventh consecutive monthly drop and the biggest annual fall since May 2021. Rents also fell in Wales for the third month running, as well as in north-east England and Yorkshire and the Humber. However, rents continue to rise in seven out of 11 regions, led by the East Midlands (3.4%), West Midlands (2.7%) and south-west England (2.6%).
Despite the small annual decline, the average monthly rent for a new let stands at £1,373, which is £350 (34%) higher than in August 2020. For sitting tenants, rents on renewed tenancies rose 4.5% year on year in July. Aneisha Beveridge, head of research at Hamptons, said: “After five years of relentless rent rises, the market has paused for breath. [But] renewal rents continue to climb.”
Separate data from Hamptons showed that one in five (20%) buy-to-let companies set up in Britain so far this year were owned by non-UK national shareholders, up from 13% in 2016. Indian investors formed the largest group of non-UK shareholders, followed by Nigerians, Poles, Irish nationals and Italians. The share of non-UK shareholders from the EU fell from 65% in 2016 to 49% in 2025, partly due to Brexit.
