Annual rent inflation in the UK has reached its lowest point in 10 months, according to the latest Goodlord Rental Index. As of May 2026, average rents are just 1.7% higher than the same period last year, marking a significant decrease from the 3.6% increase recorded in May 2025. This shift is particularly relevant for landlords, borrowers, and investors as it indicates a cooling rental market that could impact property investment strategies and mortgage decisions.
TL;DR: Average rents in England increased by only 1.7% year-on-year in May 2026; landlords and investors may need to adjust expectations amid a cooling rental market.
How Do Current Rental Trends Compare to Previous Years?
In May 2026, the average rental cost in England stood at £1,211, reflecting a modest 0.5% month-on-month increase from April. However, this figure is slightly lower than the £1,212 recorded in March, making it the first time since 2020 that May rents were lower than in March. This trend is a stark contrast to the previous year, when rents were rising at a much faster pace.
What Regions Are Experiencing Rental Changes?
The rental market’s dynamics vary significantly across different regions. The North East experienced a notable recovery, with rents increasing by 5.5% in May after a 4.9% drop in April. Yorkshire and the Humber also saw a 3.2% rise in May, rebounding from a previous decline. In contrast, regions like the East Midlands, South West, and East of England reported year-on-year decreases in rental prices, with the South West seeing a decline of 0.4% and the East of England dropping by 1.5%.
What This Means for the Mortgage Market
The current state of rental inflation is closely tied to the broader mortgage market. As rental growth slows, it may influence potential buyers’ decisions, particularly first-time buyers and those looking to invest in buy-to-let properties. With average rents rising at a slower pace than inflation and wage growth, potential landlords may find it more challenging to justify higher mortgage repayments based on rental income. This could lead to a shift in demand for mortgage products, with borrowers seeking more competitive rates or alternative financing options. For those interested in exploring options, checking current mortgage rates could be beneficial.
How Are Landlords and Investors Affected?
For landlords and property investors, the current rental inflation trends suggest a need for cautious strategy adjustments. With rental growth slowing significantly, particularly in regions like the South West and East of England, landlords may face challenges in maintaining rental yields. Investors should closely monitor regional performance, as areas like the North East and Yorkshire indicate potential for recovery, while others may require reevaluation of investment viability.
Frequently Asked Questions
What are the current average rental prices in England?
The average rental price in England as of May 2026 is £1,211, reflecting a 1.7% increase compared to the same period last year.
How does rental inflation affect mortgage decisions?
Slower rental inflation may lead potential landlords to reconsider their investment strategies and mortgage choices, as lower rental growth can impact rental yields and affordability.