Rents keep rising as landlords face new legislation and tax uncertainty
Annual house price growth eased to 2.6% in September, with the typical property valued at £272,000, according to figures from the Office for National Statistics (ONS). This marks a decline from the 3.1% annual increase recorded in the year to August 2025.
The modest rise in UK house prices serves as an early sign of the quieter market now taking shape, with industry experts noting a general slowdown in activity and heightened caution among both buyers and sellers as Rachel Reeves’ Budget draws near.
Average UK house prices increased by 2.6%, to £272,000 in the 12 months to September 2025, down from 3.1% in the 12 months to August.
— Office for National Statistics (ONS) (@ONS) November 19, 2025
Average UK private rents rose by 5.0%, to £1,360 in the 12 months to October 2025, down from 5.5% in the 12 months to September. pic.twitter.com/1g6qG2dN8D
“Subdued growth in September’s house prices are a prelude to the cooler market conditions that we are seeing today, as nervousness from impending tax reform impacts the top end,” said Nick Leeming (pictured top left), chairman at estate agency Jackson-Stops.
“We have seen the blizzard of tax proposals in recent months impact market confidence, with uncertainty on how much a house move will cost weighing heavily on families. Cautious momentum is characterising the market, with a pragmatic commitment from buyers and sellers to move forward.”
“Everyone in the property world has been laser-focused on the Budget – it’s felt like a marathon getting to this point,” added Amy Reynolds (pictured top centre), head of sales at Richmond estate agency Antony Roberts.
“And while the wait hasn’t brought the market to a standstill, it has absolutely created hesitation. Over the past few weeks, we’ve seen noticeably fewer market appraisals, simply because sellers want to know what is coming before making a move.
“That pause now feeds directly into reduced stock for the New Year, which is when the market normally builds momentum. The real message right now is that the Budget hasn’t just shaped sentiment – it has shaped supply.”
Leeming said that clarity after the budget should renew momentum only if underpinned by relative house price stability.
House price inflation varies sharply across UK regions
In England, the average house price reached £293,000 in September, a 2% increase on the year, which is below the 2.9% recorded in August. Wales saw prices climb to £209,000, up 2.7% compared to the previous year, a slightly faster pace than the 1.8% seen in August.
Scottish property values averaged £194,000, marking a 5.3% annual rise, while Northern Ireland recorded the strongest growth, with prices up 7.1% to £193,000 in the third quarter of 2025.
Among English regions, Yorkshire and The Humber posted the highest annual price inflation at 4.5%, up from 2.7% in August. London continued to see prices fall, with a 1.8% year-on-year decrease, compared to a 0.8% drop in the previous month.
“While northern regions and more affordable areas saw moderate growth, where house prices are highest, in London and the South East, values have continued to lag,” Leeming noted. “That being said, our own national data points to pent up demand from buyers, with a steady volume of viewings in September and October, matching figures recorded last year.
“Buying enquiries for Jackson-Stops remain elevated in places like Cheshire, Devon, and Sussex, suggesting a combination of lifestyle moves and downsizing will continue to be key drivers regardless of changing fiscal policy. As demand becomes more localised, we may see more buyers seek better value outside the South East, resulting in a softening of regional house price gaps.
“Our database also tells us that completion volumes are up 10% annually, suggesting a rush to the finish line before the Budget as people bet on current certainty - trading in the fog rather than waiting for the storm to clear.”
Rental growth slows but remains elevated
Meanwhile, rental prices continued to climb, though at a slower rate. Average UK private rents increased by 5% to £1,360 in the year to October 2025, compared to 5.5% in September.
In England, rents averaged £1,416 (up 5.0%), while in Wales they reached £817 (up 6.7%), and in Scotland £1,008 (up 3.4%). Northern Ireland saw average rents rise to £866 (up 6.6%) in the year to August.
Within England, the North East registered the highest annual rent inflation at 8.9%, while Yorkshire and The Humber saw the lowest at 3.8%.
“While rents continue to rise, the rate of growth has been slowing for some time,” said Alex Upton (pictured top right), managing director of specialist mortgages and bridging finance at Hampshire Trust Bank. “Even so, the conditions for further increases remain.
“Propertymark’s latest data shows demand from tenants is still significantly outpacing supply, and that level of competition is likely to keep rents under pressure. It will be important to see how that dynamic evolves now that the Renters’ Rights Act is on the statute book.
“All eyes are now on next week’s Budget. Speculation around further tax changes, including the potential introduction of National Insurance on rental income, is adding to uncertainty. This would have a particular impact on landlords holding property in their own name rather than through a company structure.”
For Upton, the government must strike the right balance. “Raising standards across the rental sector is important, but that cannot come at the expense of long-term capacity,” she said. “Without a meaningful increase in housebuilding, home ownership will remain out of reach for many, and the rental sector will need to carry more of the weight.”
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