Rental growth rates still slowing

After two years of unusually high growth, the latest evidence shows that rental growth rates continue to slow. Across the largest cities in the UK, the average rate of rental growth slowed to 6.8% for the year to end Q1 2025, from 10.0% a year earlier.
In London the slowdown has been even more distinct, slowing to 4.3% on latest data from 10.5% a year earlier. The London market peaked earlier, with even higher rates evident in 2023.
Affordability plays a central part in rental demand. Renters can make more regular choices on where they live, perhaps moving to a cheaper location in the face of steeply rising rents. With the latest affordability ratio for London at 32.6% (versus a 5-year average of 30.4%), it is clear that stretched affordability has been a key factor in slowing the rate of rental growth.
Average affordability across the 60 largest cities in the UK is currently 28.6% (versus a 5-year average of 27.0%). Over the long term earnings and rents tend to move together: forecasts suggest UK earnings growth will be 3.8% this year and 3.0% in 2026. Source: Dataloft by PriceHubble. Data was for the 60 largest cities and towns across the UK and based on flats only. Affordability: % of gross earnings spent on each renter's share of rent.