London is driving the rental slowdown, with average rents falling by 2.7 per cent annually or £65 per month, according to a report by Hamptons.
Monthly rents on new lets in the capital in September are £2,332 on average.
Across Britain, the average rent for a newly-let home fell by 0.3 per cent over the year to September — down £4 per month from £1,402 to £1,398, Hamptons said.
It said the fall marks a “notable shift” from annual growth of 4.2 per cent recorded a year earlier.
By contrast, average rents across Britain for renewed contracts increased by 4.6 per cent over the previous 12 months.
The average renewal rent was £1,307 per month, surpassing the £1,300 per month mark for the first time.
Annual rental growth by region
|
Region |
Average monthly rent |
Annual change |
|
London |
£2,332 |
-2.7% |
|
East of England |
£1,227 |
1.2% |
|
South East |
£1,476 |
0.6% |
|
South West |
£1,294 |
1.4% |
|
East Midlands |
£1,015 |
1.3% |
|
West Midlands |
£1,095 |
1.4% |
|
North East |
£928 |
2.1% |
|
North West |
£1,052 |
0.9% |
|
Yorkshire and the Humber |
£954 |
0.4% |
|
Wales |
£864 |
-0.4% |
|
Scotland |
£1,074 |
2.2% |
Buy-to-let investors look north
The North East of England was the hotspot for buy-to-let investors in the third quarter of this year, according to the Hamptons data.
Investor activity is increasingly concentrated in northern England, where yields are higher and stamp duty costs are lower.
The Hamptons report estimated that 28.4 per cent of homes sold in the North East were bought by a landlord in the third quarter of 2025, compared with eight per cent in London, 7.1 per cent in Scotland and 6.9 per cent in Wales.
Aneisha Beveridge, head of research at Hamptons, said: “Landlord purchases haven’t collapsed in the face of higher taxes and tighter regulation — but they have shifted.
“New landlords have increasingly become an endangered species in markets across southern England, where big stamp duty bills and flatlining prices have nudged investors northwards.
“But in places like the North East, landlord activity remains close to all-time highs, showing that the buy-to-let market is adapting rather than retreating.”
The Hamptons lettings index uses data from the Connells Group to track changes to the cost of renting.
The index is based on achieved rather than advertised rents.
Homes bought by landlords from July to September 2025
|
Region |
Share of homes bought by landlords |
|
London |
8% |
|
South East |
10.5% |
|
South West |
8.1% |
|
East of England |
8.2% |
|
West Midlands |
13.1% |
|
North East |
28.4% |
|
North West |
13.3% |
|
Yorkshire and the Humber |
11.2% |
|
Wales |
6.9% |
|
England and Wales |
11.3% |
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