Average private rents in Great Britain have fallen for the first time in five years as lower mortgage rates helped take some of the heat out of the rental sector, data shows.
Years of above-inflation increases in rents have put the squeeze on many households but the estate agent Hamptons said the average rent on a newly let property fell by 0.2% year on year in July. It was the first annual decline since August 2020, during the height of the Covid pandemic – although this national figure masks wide regional variations.
Rents have risen in recent years owing to a combination of factors. These include demand for rental properties outstripping supply, the pandemic and its fallout affecting how many people live and work, and buy-to-let landlords passing on increases in their costs caused by higher interest rates.
After five interest rate cuts over the past year, the mortgage costs for some landlords have fallen, reducing the need to pass on further costs. Meanwhile, lower mortgage rates are also making it easier for some tenants to begin looking to buy their first home, thereby reducing demand.
The figures are based on data from Connells, one of the UK’s biggest estate agency groups. While they represent a sliver of good news for tenants, many of whom have had to grapple with sizeable increases to their housing costs, these rent falls are not yet widespread, Hamptons said.
Greater London continues to record the steepest declines, with rents falling by 3% year on year in July – the seventh consecutive month of decline and the biggest annual drop since May 2021. The falls in Greater London, as well as a sharp slowdown in the north of England over the past year, helped push the national figure into negative territory.
Rents in Wales fell on an annual basis for the third month in a row in July, while there were also falls in north-east England and Yorkshire and the Humber.
However, rents are still rising in seven out of 11 regions, with the East Midlands (3.4%), West Midlands (2.7%) and south-west England (2.6%) leading the way.
Despite the small annual decline, the average monthly rent for a new let of £1,373 remains £350 – or 34% – higher than in August 2020.
For sitting tenants it is a different story. Average rents on renewed tenancies continued to rise: up 4.5% year on year in July.
“After five years of relentless rent rises, the market has paused for breath,” said Aneisha Beveridge, the head of research at Hamptons. “[But] renewal rents continue to climb.”
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Last month the property website Rightmove reported that the rental sector was continuing to cool after the “pandemic frenzy”. Some of this was attributed to improvements in the balance between supply and demand, with the number of available properties to rent said to be 15% higher than at the same time last year.
This month, Barclays said that, typically, housing accounts for close to a third (30.8%) of renters’ take-home pay, whereas homeowners report spending just over a quarter (26.6%) of their earnings on their mortgage.
Hamptons also issued data that showed one in five (20%) buy-to-let companies set up in Britain so far this year were owned by non-UK national shareholders. The proportion was up from 13% in 2016. Indian investors made up the largest group of non-UK shareholders, followed by Nigerians, Poles, Irish nationals and Italians. Meanwhile, Brexit has contributed to the share of non-UK shareholders coming from the EU falling from 65% in 2016 to 49% in 2025, the company said.