Rents across the UK could increase more quickly during the remainder of 2026, with annual growth forecast to reach between 4% and 5% by the end of the year, according to property portal Zoopla.
The latest outlook comes as higher mortgage rates continue to affect the balance between the sales and rental markets. More potential buyers are remaining in rented accommodation for longer, increasing demand for available rental homes.
At the same time, the supply of properties entering the rental market has remained below the levels recorded during the same period in 2025.
Rental Growth Picks Up
The latest figures show that rental growth has already started to accelerate.
Annual rent growth reached 2.6% in July, compared with just 1.6% in February. The average UK rent has now risen to around £1,340 per month.
Zoopla says the rental market had been gradually becoming less pressured over the previous three years as the availability of rental properties improved and rent increases slowed.
However, that trend is now beginning to reverse in some parts of the country.
Mortgage Rates Keep Buyers Renting
Higher borrowing costs are playing an important role in the changing rental market.
With mortgages becoming more expensive, some people who might otherwise have purchased their first home are choosing to remain tenants for longer.
This adds further demand at a time when fewer properties are becoming available to rent.
The impact is particularly noticeable in areas where the supply of rental homes has fallen most significantly.
London Faces Strong Rental Pressure
London is experiencing some of the strongest upward pressure on rents.
Zoopla says higher mortgage rates have had a particularly significant effect on potential buyers in the capital, keeping more would-be purchasers in rented accommodation.
More affordable rental markets are also seeing increased pressure, partly because tenants in these areas may have greater capacity to absorb rent increases.
However, affordability remains an important limit on how far rents can rise.
While demand may be strong, landlords cannot increase rents indefinitely if tenants are unable or unwilling to pay higher prices.
Landlord Investment Remains Low
Another factor affecting rental supply is the relatively low level of new investment from landlords.
Fewer landlords entering the market means there are fewer additional homes being made available to renters.
At the same time, existing tenants are staying in rented accommodation for longer because of the difficulty of moving into home ownership.
Together, these trends are putting additional strain on the supply of rental properties.
Zoopla Expects Further Rent Increases
Richard Donnell, executive director at Zoopla, said the rental market was beginning to tighten again following several years in which improving supply had helped slow rental growth.
He highlighted how relatively small changes in the number of available rental properties can have a noticeable impact on rents.
According to Zoopla’s latest projections, the combination of limited landlord investment and longer rental periods could result in UK rents rising by 4% to 5% annually by the end of 2026.
The organisation argues that increasing the supply of rental homes through greater investment would provide the most sustainable way of improving choice for tenants and keeping rental growth more stable over the longer term.
What Does This Mean for Landlords?
For landlords, continued rental growth could provide an opportunity to increase rental income, particularly in areas where demand remains strong.
However, the wider costs of running a rental property also need to be considered. Mortgage rates, taxation, maintenance, insurance and regulatory requirements can all affect the amount of profit a landlord ultimately retains.
The latest Zoopla figures also highlight the importance of location. Rental conditions vary significantly across the UK, meaning demand and achievable rents can differ considerably between regions.
For tenants, meanwhile, the prospect of faster rent growth could add to affordability pressures, particularly if the supply of suitable properties remains limited.
Unless more homes are brought into the rental market, the imbalance between supply and demand could continue pushing rents higher through the remainder of 2026.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property