Average rent prices are increasing across the UK, with significant year-on-year increases reported in England, Wales, and Scotland up to July 2025. This trend is driven by increased demand in the rental market, as fewer people are able to buy homes due to higher mortgage rates, and by factors such as high levels of migration. While growth rates vary by region, with faster increases in some areas and slowing growth in others, the overall trend indicates continued rental price increases.

Recent Data on Rent Increases

Recent data from the Office for National Statistics (ONS) shows that average rents continue to rise, although the pace of that growth is beginning to slow in some areas.

• England: Average rents increased by 6.0% in the 12 months to July 2025.
• Wales: Rents rose by a sharp 7.9% in the same period.
• Scotland: Average rents increased by a more modest 3.6%.
• Northern Ireland: Rents saw a 7.4% increase in the 12 months to May 2025.

Why Rents Are Rising

High Demand

Higher mortgage rates have made homeownership less affordable, pushing more people into the private rental market, which increases demand for rental properties. High levels of migration into the UK have also contributed to increased demand for rental homes.

Stagnating Wages

For a considerable period, rents have been outstripping earnings, making it harder for many renters to afford the increasing costs.

Regional Variations

While rents are rising fastest in the north-east of England, there's a more nuanced picture. Rent increases are starting to slow in some large cities, and some areas, like certain parts of London and Leeds, have even seen rents fall or stay flat over the last year. This suggests that affordability ceilings are being reached in some of the most expensive markets.

Tips for Negotiating Your Rent

It might seem daunting, but negotiating your rent is a valid option, especially if you're a good tenant. A landlord might prefer to keep a reliable tenant rather than go through the cost and hassle of finding a new one.

1. Know Your Market

Before you negotiate, research the average rent for similar properties in your local area. Websites like Rightmove and Zoopla are excellent for this. If your landlord's proposed increase is higher than the market average, you have a strong case.

2. Be a Great Tenant

Remind your landlord that you pay rent on time, have looked after the property well, and are respectful of neighbours. This can be a powerful bargaining chip.

3. Propose a Compromise

If an increase is unavoidable, propose a smaller increase or a phased increase over several months. You could also ask for a long-term agreement in exchange for accepting a smaller rise.

4. Know Your Rights

Research the latest legislation, such as the Renters’ Rights Bill 2025, which gives tenants more power to challenge unreasonable increases at a tribunal without fear of eviction.

How to Budget for and Manage Rent Increases in Advance

With the market in flux, the best strategy is a proactive one. Here's how to budget for and manage rising rent effectively.

1. Budget in Advance

As a renter, it's wise to budget for a potential rent increase each year. Assuming a 5-10% increase, you can start setting aside the difference in a dedicated savings pot to absorb the hit when it comes.

2. Separate Your Savings

Create a dedicated savings pot just for housing costs. This makes it easier to track your progress and ensures you're prepared for your landlord's rent review.

3. Track Payments Effectively

Always pay your rent via a traceable method, such as a standing order or bank transfer. This creates an automatic record of your payments, which can be invaluable in case of any disputes.

4. Use Rent Reporting

For many, rent is the single largest monthly outgoing. Using a financial tool with rent reporting allows you to automatically track your payments. This helps you to build a comprehensive picture of your finances, ensuring you always know where you stand.

How to Set Up a Dedicated Savings Pot for Rent Increases

A dedicated savings pot is a powerful tool for visualising your goal and making it feel more achievable. Instead of just saving in a general account, you can create a specific fund just for your rent increase.

1. Name It: Give your pot a clear name like "Rent Increase Fund" or "Rent Review Buffer."
2. Set a Target: Calculate your potential increase by applying a percentage to your current rent (e.g., if your rent is £1,000 and you anticipate a 7% increase, your target is £70 per month).
3. Automate Your Savings: Set up a weekly or monthly automatic transfer from your main account into this new pot. By putting a small amount aside regularly, you'll reach your goal without even noticing it.

The best defense against a rising rental market is an airtight budget and a proactive savings strategy. By staying informed and using the right financial tools, you can stay in control, no matter how the market changes.