Asking rents across the UK are continuing to fall, placing renewed pressure on house prices as the housing market enters 2026 on a weaker footing, according to the latest figures from Home.co.uk.
The property index reports that annual rent growth has now dropped to minus 4.1 per cent, marking a deepening decline compared with previous months. This downturn is no longer limited to a few areas. Instead, every region in England, as well as Scotland and Wales, is now recording year-on-year reductions in advertised rents.
This trend follows separate data from Hamptons, which recently confirmed that newly agreed rental prices have fallen on an annual basis for the first time since 2011. Together, the figures suggest that tenants are gaining slightly more bargaining power after years of rapid rent increases.
Regional differences in rental declines
Some parts of the country are experiencing sharper falls than others. The East Midlands has seen the steepest drop, with asking rents down by 12.5 per cent over the past year. This makes it the weakest-performing region for rental growth nationwide.
London presents a mixed picture, with significant variation between boroughs. Out of the capital’s 33 boroughs, 18 are now showing annual rent declines. In several prime areas, demand has softened noticeably, leaving landlords with fewer applicants and longer void periods.
Kensington and Chelsea has emerged as one of the slowest markets in London. Properties there are now taking an average of 49 days to secure a tenant, while advertised rents have fallen by nearly 7 per cent over the past 12 months. This reflects a growing mismatch between rental prices and what tenants are willing or able to pay.
Supply of homes rises again
Alongside falling rents, the number of homes being listed for sale has increased sharply. Home.co.uk reports that vendor activity recovered strongly in December following a quieter November, with around 20 per cent more properties coming onto the market compared with the same time last year.
The strongest rises in housing supply were recorded in Scotland, the North East, the East Midlands and the North West. These areas have now reached their highest January levels of available homes since 2015.
Although unsold stock has dipped slightly in recent months, seasonal trends suggest that listings are likely to build quickly during the first half of the year. Spring traditionally brings more sellers to the market, which could add further pressure to prices if demand does not keep pace.
House prices remain vulnerable
Despite a modest annual increase of 0.5 per cent across England and Wales compared with January 2025, house prices remain fragile. Most regions posted month-on-month declines, indicating that confidence is still weak.
The East of England recorded the sharpest monthly fall, with prices dropping by 0.8 per cent. In contrast, the North East was one of the few regions to show growth, rising by 2.7 per cent, narrowly ahead of the North West.
London continues to struggle, with average prices now down 1 per cent on an annual basis. This reflects both reduced demand and the growing number of properties available for sale.
Slower sales add further pressure
Longer selling times are also contributing to the downward trend. On average, homes are now taking five days longer to sell than they did a year ago. This suggests that buyers are becoming more cautious and are less willing to rush into purchases.
The South West stands out as the region where conditions have weakened most sharply. Extended marketing periods there are feeding into price adjustments, as sellers are forced to lower expectations to secure a deal.
According to Home.co.uk, the housing market has reached a critical stage. Growth is edging towards zero nationally and has already turned negative in some locations, undermining confidence even among those who previously remained optimistic.
Landlords face growing pressure
For landlords, the combination of falling rents and softening house prices is creating a difficult environment. Rental income is declining at the same time as property values are eroding in real terms, reducing overall returns.
With longer void periods and slower tenant demand, many landlords are being squeezed from both sides. This could encourage some to exit the market altogether, adding further supply to the sales market and reinforcing downward pressure on prices.
Taken together, the latest figures point to a housing market in transition. After years of rising rents and strong price growth, conditions are now shifting in favour of tenants and buyers, while landlords and sellers face increasing challenges in maintaining returns.
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