For landlords, this means renewed momentum in rental values, demand that is strengthening rather than softening, and a market where a shrinking number of available homes is once again supporting returns.
Here's a quick snapshot of the current rental market:
Annual rental inflation for new lets across the UK
Yorkshire and Humber experienced the highest increase in rental value
The East Midlands and West Midlands experienced the smallest change in rental value
Average monthly rent UK
Now let's explore what this means for landlords across the country.
Rental growth is accelerating again, with annual rental inflation at 2.6% for new lets across the UK as of July 2026, up from a low point of 1.6% in February.
Average rents now stand at £1,343 per month, and the shorter-term picture is stronger still: rental growth over the last six months is running at an annualised rate of around 4%.
Beneath the headline figure, performance varies widely by region:
Rents are now expected to rise by 4-5% by the end of 2026, which would bring rental growth back into line with average earnings growth of 4.1% after three years where pay has outpaced rents.
For landlords focused on returns, the broader investment case remains encouraging.
While rental growth has moderated, yields continue to perform well - particularly in lower-value regions where entry costs are more accessible and rental growth remains stronger.
Northern regions and more affordable markets continue to offer stronger yield potential and greater scope for rental growth. By contrast, London and southern markets typically deliver more modest yields, balanced by long-term capital stability and consistent tenant demand.
As always, a localised approach remains key when assessing performance and opportunity.
After two years of easing, rental demand is building again.
There are currently 5.3 enquiries per rental property, which is 6% higher than a year ago and the highest level for almost two years. When comparing that with the 11.4 enquiries per rental property in the peak of Q3 2023, competition remains below this peak but is steadily increasing, with no signs of slowing.
Higher mortgage rates are a key driver, keeping would-be first-time buyers in rented accommodation longer. The average UK buyer now needs an extra £18,200 of deposit to keep their mortgage repayments unchanged following this year's rate rises, rising to £35,500 in London.
For landlords, that sustained barrier to homeownership means continued demand and fewer void periods, essential for maintaining positive returns.
The supply picture has turned after three years of gradual improvement. There are now 3% fewer homes for rent than a year ago, with the flow of new listings down 6%.
As with everything, the differences in supply are nuanced regionally. London has 6% fewer homes for rent than a year ago, and Yorkshire and the Humber 12% fewer, with inner London tightest of all with 13% less supply alongside rising demand.
Wales is the exception, with a 7% increase in homes for rent giving renters more choice and slowing the pace of rental growth there.
New investment in rental homes remains low as landlords face higher costs and greater regulation. However, Zoopla highlights that Scotland has had similar rental rules to the introduced Renters’ Rights Act for several years and is experiencing the same pattern of fewer rental properties and rising rents, suggesting that supply and demand are having a greater influence on the market than new legislation.
For landlords, this underlines the value of working with experienced agents to navigate both pricing strategy and compliance.
Average enquiries per rental property in the UK, the highest for almost two years
Fewer homes available to rent than a year ago, supporting rental inflation
Annual rental value increase in the UK, excl. London
Annual rental value increase in the UK
After a period of cooling, the market is tightening again as supply lessens and demand strengthens, pointing to firmer rental value growth into 2027.
For landlords, this creates a dependable environment - particularly for those who take a strategic, long-term approach and can adapt to local market conditions.
Want to find out more? Speak to your local branch team today and book your property in for a free, up-to-date rental valuation.
Sources: *Zoopla Q3 Rental Market Report 2026
MKT/UKON/140926
