UK rental price growth is forecast to accelerate to between 4% and 5% by December 2026, according to new data from Zoopla.
The acceleration is already visible in market data for new lets. Annual rental growth reached 2.6% in July 2026, climbing steadily from a recent low of 1.6% recorded in February. By mid-year, the average monthly rent for a new tenancy in the UK had reached £1,340. This shift follows a three-year trend of improving supply that officially went into reverse in May 2026.
A contraction in the number of available homes is the primary driver of this renewed pressure. By August 2026, the volume of rental properties on the market fell by 3% compared to the previous year. This supply squeeze coincides with persistent demand, as higher mortgage rates continue to trap would-be first-time buyers in the rental sector for longer periods. This lack of churn reduces the flow of existing homes back into the market, further tightening conditions for new tenants.
Market competition has intensified as a result. The average number of enquiries per rental listing rose to 5.3 in late 2026, a 6% increase over the previous year and a 22-month high. According to analysis by Landlord Today, this imbalance between available stock and active searchers is forcing the projected year-end growth rate toward the 5% mark.
Regional Disparity and Policy Shifts
The rental landscape is also reacting to regional economic pressures. While London saw rental growth increase to 2.9% in mid-2026—up from 1.7% a year prior—growth remains somewhat constrained in the capital by affordability caps.
With supply falling nationwide and the demand for flexible housing remaining high, the broader trend points toward a more expensive environment for UK renters through the remainder of 2026 and into 2027.
