UK rental growth accelerated in July while house price inflation continued to slow for the second consecutive month, according to Office for National Statistics (ONS) data released this week.
Average monthly private rents rose 3.7% in the 12 months to July to £1,393, up from annual growth of 3.3% in June. The increase represents the highest annual rate of rent inflation since December 2025, driven primarily by an acceleration in London, where annual growth rose from 2.2% to 3%.
Regional rental variations
Average rents reached £1,451 in England after rising 3.8% year-on-year, while Wales recorded a 4.5% increase to £843 and Scotland a 1.7% rise to £1,016. In Northern Ireland, average rents rose 2.3% to £875 in the 12 months to May 2026, marking the lowest annual rate of rental inflation recorded there in more than five years.
The North East continued to record the strongest rental growth among English regions at 6.3%, while the South East had the lowest at 2.9%. London remained the most expensive region to rent, with an average monthly cost of £2,317, compared with £783 in the North East.
House price growth moderates
The rental figures contrasted with a slowdown in the sales market, where average UK house prices increased by 2% in the 12 months to June to £272,000. Annual growth was down from 3% in May, a trend that may be influenced by broader inflation concerns affecting mortgage rates.
The ONS attributed the slowdown to weaker price growth in early summer this year compared with the same period in 2025, when prices rebounded following changes to stamp duty in England and Northern Ireland. Average UK prices rose just 0.1% between May and June, compared with a 1% increase over the same period last year.
House prices increased by 1.8% annually to £293,000 in England and by the same rate to £213,000 in Wales. Scotland recorded growth of 2.3%, taking its average to £195,000. The North West had the strongest annual house price growth among English regions at 4.7%.
London market continues decline
London remained the weakest market, with average prices falling 2.5% year-on-year. It marked the tenth consecutive month of annual house price declines in the capital. The ongoing challenges in the London market come as first-time buyers face mounting obstacles to property ownership.
Northern Ireland recorded considerably stronger growth in house prices, with average prices rising 9.2% annually to £202,000 in the second quarter of 2026.
The divergence between rental and sales market performance suggests landlords may benefit from sustained demand in the rental sector while house price growth moderates across most of the UK.
