London Average Rent Price Hit Record £2,736 in 2025
Average advertised rents in London climbed to a new record of £2,736 per month in the third quarter of 2025, according to new data from Rightmove. This represents a modest 1.6% annual increase, the slowest pace of growth in the capital since mid-2020, signalling that the market may be reaching an affordability ceiling.
Across the rest of the UK, average advertised rents also hit a record high of £1,385 per month, up 3.1% year-on-year. Supply continues to recover slowly, with the total number of rental homes available now 9% higher than a year ago, though still 23% below 2019 levels. The flow of new listings has almost stalled, rising just 1% over the year, the weakest figure recorded in 2025.
Tenant demand has softened by 14% compared with this time last year as affordability pressures mount. Despite average earnings rising by 5%, renting continues to consume a large share of income, around 44% of the average wage, up from 40% five years ago.
Landlord caution has also increased amid tax and regulatory uncertainty. The combination of higher stamp duty for rental purchases, potential new National Insurance contributions for landlords and the forthcoming Renters’ Rights Bill has curbed appetite for new investment.
While availability is slowly improving, the imbalance between supply and demand remains pronounced, keeping upward pressure on rents. The capital’s rental market appears to be entering a more subdued phase (prices are stabilising, not falling), as affordability constraints and shifting regulations reshape investor confidence.
Looking ahead to 2026, London’s rental market is expected to remain under structural pressure, even as the pace of growth slows. Continued economic uncertainty, tighter landlord regulation and higher borrowing costs are likely to limit new investment in the private rented sector. While this may stabilise rents in some areas, a chronic shortage of affordable homes will keep prices elevated across much of the capital.
Analysts anticipate only modest rental growth next year (between 1% and 3%) but warn that this apparent calm could mask deeper challenges. As landlords exit the market and tenants face limited alternatives, competition for quality homes will stay intense. Unless housing supply expands meaningfully or tax incentives shift, 2026 could mark the beginning of a slower yet more unequal rental landscape, where affordability becomes the defining issue of London’s housing debate.
