Average rents on new tenancies slip across Great Britain as demand cools and stock nears pre‑COVID levels
Newly agreed rents across Great Britain declined over a full calendar year in 2025 for the first time since the Hamptons Lettings Index began in 2011, according to the latest figures from the agency group.
The index, which is based on rental data from across the Connells Group, shows that average agreed rents on new lets slipped by 0.7% last year. This left the typical tenant moving into a property paying £1,371 per month, around £10 less each month than in 2024 for an equivalent home.
London led the downturn, with new let rents in the capital starting to fall in January 2025 and ending the year 2.7% lower, a drop of £63 per month and a return to levels last seen in June 2023. By December, four further regions – the South East, East Midlands, Yorkshire & Humber and Wales – were also recording annual declines in newly agreed rents, with falls ranging from 0.2% to 1.4%.
Three other areas – the East of England, South West and Scotland – saw growth of less than 1% in 2025. On current trends, Hamptons expects these regions could move into negative territory in early 2026.
The figures point to a rental market shaped more by softer demand than by a surge in supply. The stock of homes available to let at the end of 2025 was 6% higher than in December 2024 and only 8% below 2019 levels. During the post-pandemic period of double-digit rent growth, the number of available rental properties had fallen to 52% below 2019.
Hamptons attributes the recent improvement in choice primarily to weaker tenant demand rather than renewed buy-to-let investment. The share of purchases made by landlords slipped again in 2025, with investors accounting for 10.9% of sales across Great Britain, down from 12.0% in 2024 and well below the 15.8% recorded in 2015, before the original 3% stamp duty surcharge on additional properties came into force.
Last year marked both the lowest landlord share since Hamptons’ records began in 2012 and the first full calendar year in which investors were subject to the higher 5% surcharge on additional property transactions.
Despite the national decline in landlord purchases, the North East remained the most investment-focused region, with landlords responsible for 29.0% of transactions, significantly above any other part of Great Britain. The East Midlands and West Midlands followed, with investors making up 15.1% and 15.0% of buyers respectively.
Hamptons noted a shift in the pattern of buy-to-let activity in 2025. Northern England continued to dominate in terms of investor share, but the easing in mortgage rates appeared to support renewed interest in some Southern markets. The South East, East of England and North East were the only English regions to register a year-on-year rise in the proportion of homes bought by landlords.
The index also highlights how trends in new lets are feeding through to existing tenancies. Newly agreed rents usually set the going rate in a local market, with renewal rents moving more slowly towards that benchmark.
In 2025, the average monthly cost of a contract renewal increased by 3.3% year on year to £1,310 across Great Britain. That left a £61 gap between average rents for new lets and renewals, the narrowest difference since July 2021 and down from a peak gap of £170 in October 2023.
Against this backdrop, Hamptons expects the regulatory environment to become a more prominent influence on landlord behaviour and pricing through 2026, particularly around the implementation of the Renters’ Rights Act in May.
“On paper, 2025 looked like a good year for tenants: rents on new lets ended 2025 lower than they started, and tenants had more choice than before,” said Aneisha Beveridge (pictured right), head of research at Hamptons. “However, falling rents were driven more by strong first-time buyer numbers and wider economic weakness than by improved tenant affordability. Fewer tenants are taking their first step into the rental market, with many staying at home longer and being reluctant to commit to the cost of renting a place of their own.
“2026 brings the implementation of the Renters’ Rights Act in May, which bans offers above the asking rent. This means that agreed rents and advertised rents may start to rise at different rates. The block on landlords accepting a price above what they asked for is likely to push up advertised rents, with more tenants making offers below the higher asking price instead. However, at least initially, it is unlikely to impact the values actually being achieved.
“But towards the back end of the year, it’s possible the implementation of the Renters’ Rights Act may start proving inflationary for agreed rents. If landlords start to find the procedural and legal machinery underpinning the new rules lacking, it is likely to slowly squeeze rental homes out of the market. From a supply perspective, the lack of appetite means the share of homes bought by investors could fall below 2025’s already low levels.”
For mortgage professionals, the data suggest that while rental affordability pressures have eased slightly for new entrants in some markets, investor demand remains subdued under higher transaction costs and evolving regulation. Buy-to-let lending volumes are likely to remain closely tied to regional variations in yields, stock levels and the impact of the Renters’ Rights Act on landlord confidence through 2026.
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