England Rental Market Shows Signs of Slowdown

After months of record-breaking highs, the England rental market is now showing its first signs of cooling. The latest Goodlord Rental Index, which tracks tenancy agreements across the country, reveals that average rents dipped in September while inflation in rental prices slowed. This marks a significant change in pace after an intense summer, where competition among tenants pushed prices to new peaks.

Falling Rents in the England Rental Market

Average rents across England slipped by 2% in September, falling from £1,480 in August to £1,447 per calendar month (pcm). The most dramatic decreases were seen in the North East and East Midlands, both recording drops of around 8%. The South West followed closely, with a decline of 7%.

Not all areas experienced this downward trend. Greater London, fuelled by strong demand from students and recent graduates, saw rents rise by more than 6% in September. The West Midlands also edged upwards by 1%, showing that local market dynamics still play a crucial role in shaping rental costs.

Year-on-Year Comparisons

Despite the monthly declines, average rents remain 2.1% higher than the same time last year. London once again leads the way, posting annual growth of 3.8%. In contrast, the South East is the only region to buck the trend, where average rents dipped slightly by 0.6% compared to September 2024.

This annual increase, however, highlights a broader trend: the pace of rental inflation is steadily slowing. In January 2025, annual rent growth stood at 4.6%. By September, it had fallen to just 2.1%. This suggests that the extraordinary escalation of rental prices witnessed in recent years may finally be tapering off.

England Rental Market Voids Lengthen

Alongside falling rents, landlords are experiencing longer void periods – the time between tenancies. In September, the average void length across England rose to 16 days, compared to 15 in August. This is also longer than the 15-day average recorded during the same month last year.

Only two regions reported shorter voids. Greater London saw voids reduce from 12 days to 10, reflecting sustained tenant demand. Meanwhile, the North West recorded a significant improvement, with average voids dropping from 21 days to 17 – a 19% reduction.

These figures suggest that, outside of the capital and select hotspots, landlords may need to adjust expectations for how quickly new tenants can be secured.

Salaries on the Rise

Tenants signing new agreements in September saw positive news when it came to income levels. The average renter salary rose by 2.3% month-on-month, climbing from £37,584 in August to £38,466. Compared with September 2024, this represents a 3% increase.

Encouragingly, salary growth is currently outpacing rental cost increases, both monthly and annually. For tenants, this offers a degree of financial relief after a period when wages struggled to keep up with escalating housing costs.

What Industry Leaders Say About the England Rental Market

William Reeve, Chief Executive at Goodlord, commented on the data:

“As predicted, this month’s figures show the first signs of a market cooling off after an intense summer of record-breaking rents. With prices now falling month-on-month and annual rental inflation easing, the lettings market is beginning to slow ahead of the winter period.”

Reeve also noted the potential impact of upcoming legislation:

“The Renter’s Rights Bill, which is only weeks away from becoming law, introduces several new variables into the market. From limiting rent increases to once per year, to banning over-bidding by tenants, the sector is facing a shift towards less predictable patterns.”

The Impact of the Renter’s Rights Bill

The forthcoming Renter’s Rights Bill could reshape the landscape of England’s rental market. Key measures include:

• Limits on rent increases: Landlords will only be able to raise rents once annually.
• Bans on over-bidding: Tenants will no longer be able to offer higher rent than advertised to secure a property.
• Improved protections: Additional measures aimed at balancing the rights of tenants and landlords are expected to follow.

These changes are likely to add complexity to the market. While they may provide more stability for tenants, landlords will face new challenges in planning their rental strategies.

England Rental Market Enters a New Phase

The signs are clear: England’s rental market is moving away from the frenetic growth seen earlier in 2025. With cooling rents, lengthening voids, and new legislation on the horizon, the market is entering a transitional phase.

For tenants, this could bring a welcome period of greater affordability and stability. For landlords, however, it signals a need to adapt to shifting conditions and evolving regulations.

Looking Ahead

The months ahead will be critical in shaping the future of the rental sector. Much will depend on how the Renter’s Rights Bill is implemented, and how both landlords and tenants adjust to the new framework.

As autumn gives way to winter, the market is expected to remain quieter, with fewer pressures driving up demand. Yet the unpredictable mix of economic conditions, student demand, and legislative change ensures that the coming year will remain one to watch closely.