Weak landlord investment is expected to push UK rents up by between 4% and 5% by the end of 2026, according to Zoopla. This forecast comes as the supply of rental homes has fallen for the first time in three years, with the number of available properties beginning to drop in May.
Zoopla's data indicates there are now 3% fewer homes to rent than a year ago, and supply in August was 6% lower. This reverses a previous recovery in supply that had helped to slow rent increases in 2024 and 2025.
Higher mortgage rates are contributing to the situation by keeping more potential first-time buyers in rented accommodation for longer, which reduces available supply. Zoopla executive director, Richard Donnell, noted that affordability remains a constraint on how far rents can rise.
Rents were 2.6% higher in the 12 months to July, an increase from 1.6% annual growth in February, with the average monthly rent now standing at £1,340. Rent increases are generally strongest in areas where the number of available homes has seen the sharpest decline.
Yorkshire and Humberside experienced a 12% fall in homes to rent, while London saw a 6% reduction in supply. Conversely, Wales recorded a 7% increase in available homes, leading to a sharper slowdown in rent growth there.
Cheaper rental areas, with average costs below £750 a month, have seen a 5.4% rise, more than double the national rate. Examples include Dumfries, where rents have increased by 11.3%, and Carlisle, which recorded an 8.8% rise.