Rents continue to climb as landlords face tax and regulatory challenges
UK house prices rose by 1.7% in the year to October, reaching £270,000, though the annual increase was down from the 2% growth recorded in the year to September, indicating a modest cooling in price growth.
Figures published by the Office for National Statistics (ONS) revealed annual house price growth in all UK countries. In England, average prices increased by 1.4% to £292,000 over the 12 months to October. In Wales, the average reached £211,000, up 1.5% year-on-year, while Scotland saw stronger growth, with prices rising 3.3% to £192,000 over the same period.
Among the English regions, the North East recorded the highest house price inflation, at 5%, in the 12 months to October. This was up from 3% in the 12 months to September 2025. Annual house price inflation was lowest in London, where prices fell by 2.4% – even higher that 1.6% decrease in the previous month.
Average UK house prices increased by 1.7%, to £270,000 in the 12 months to October 2025, down from 2.0% in the 12 months to September.
— Office for National Statistics (ONS) (@ONS) December 17, 2025
Average UK private rents rose by 4.4%, to £1,366 in the 12 months to November 2025, down from 5.0% in the 12 months to October. pic.twitter.com/qebtXK8pMq
“Now that any uncertainty regarding anticipated Stamp Duty reforms across England and Northern Ireland in the build-up to the Autumn Budget is behind us, we should see the flow of housing transactions returning to a much smoother and expected seasonal trend,” said Nathan Emerson (pictured top left), chief executive of industry body Propertymark.
“As we head into the new year, we traditionally see a positive uplift in activity with many people choosing to market their property directly after Christmas, as well as buyers firing up their ambition to move as we approach springtime.
“Boosting the supply of new homes to meet an ever-increasing demand remains integral to overall house price stability. With firm promises from various governments across the UK, it will be a case of keeping a close eye on progress regarding precisely how many homes are completed as the new year plays out.”
Alongside easing house price growth, rental costs continued to rise. Average UK monthly private rents increased by 4.4% in the 12 months to November 2025, taking the typical rent to £1,366 on a provisional basis.
While rental price growth also saw a slowdown from the 5% annual rise registered in the year to October 2025, the latest figure still represents a significant increase in tenant outgoings.
In England, average rents rose by 4.4% over the year to November, reaching £1,422. In Wales, rents climbed 6.1% to £820, while in Scotland they were up 3.3% to £1,012. In Northern Ireland, average monthly rents increased by 6.4% to £871 in the 12 months to September 2025.
Within England, there were marked regional differences. Annual private rental inflation in the North East was the highest at 8.4% in the year to November 2025, while London recorded the lowest rate at 2.8%.
“While the pace of rental growth has slowed, 2025 still delivered significant increases, underlining how stretched the private rental sector remains,” said Alex Upton (pictured top centre), managing director of specialist mortgages and bridging finance at Hampshire Trust Bank. “That pressure is not easing. The recent Budget has added to it, with the government’s own figures showing 2.4 million landlords will face higher taxes by the end of this Parliament. For some, that could be the point they call time on their portfolios.
“Regulatory change continues to build. From energy standards to tenancy reform, landlords are being asked to adapt at speed, often without clarity. The Renters’ Rights Act will be another major shift in how property is owned and managed, and we are already seeing investors respond.
“There is a clear move towards more complex asset types such as HMOs, semi-commercial units and mixed-use portfolios. That shift is not just about chasing yield. For many, it is about finding a way to stay in a sector that is getting harder to navigate. Brokers are seeing it play out on the ground every day.
“Improving standards is the right ambition, but there is a line between raising the bar and pulling the rug. If pressure continues to build without recognition of the consequences, we risk weakening the very market people rely on. That is not a policy warning. It is already happening.”
For Emma Cox (pictured top right), managing director of real estate at Shawbrook, the announcements made by the Chancellor around rental income tax increases and mansion tax will be pushing for the professionalisation of the rental market.
“More experienced landlords will be better equipped to handle these changes, especially ahead of the Renters’ Rights Act coming into effect next year,” she said. “Though this may be challenging, it could be opportune for well-adapted professional landlords down the road.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
