According to Zoopla, supply shortfalls mean average rents for new lets have increased in the year to April 2026.
Richard Donnell, Executive Director at Zoopla, says average rental inflation at 2.1% “understates what most renters moving home are experiencing. Three-quarters of rental areas are growing faster than the national average.
“There are 25% fewer homes to rent than pre-pandemic levels, which is keeping rent inflation positive.”
The report also found rents in areas where average monthly costs are below £750 are rising at more than twice the national rate, while markets with average rents above £1,250 are recording growth at or below the UK average.
Annual rent increases of 5%
Tenants in lower-cost markets are facing annual rent increases of 5% or more, while rental growth has slowed sharply in some higher-cost areas.
The same pattern is repeated in regional and city-level data. Birmingham recorded annual rental falls of -0.1%, while rents in Nottingham were down by 1.5%. At the opposite end of the scale, rents in the North East increased by 3.8%, while Northern Ireland recorded annual growth of 9.9%. Belfast posted the strongest rental growth for major cities at 10.8%.
Competition for rental homes has eased
At the same time, though, competition for rental homes has eased since the post-pandemic peak. Zoopla recorded an average of 5.6 enquiries per rental property in May 2026, down from 15.5 in 2022. Despite this, demand remains above pre-pandemic levels.
The number of homes available to rent remains below pre-pandemic levels. Zoopla says rental supply is still running between 20% and 30% below pre-pandemic levels across every region, while investment in new private rented stock remains low.
Increase in London’s rental demand
London was the only region to record an increase in rental demand, which rose by 6% over the year. Rental inflation in the capital increased to 2.2%, up from 1.9% a year earlier.
Zoopla says elevated mortgage rates have had the greatest impact on first-time buyers in London, where deposits and income levels are highest.
Earnings growth outstripping rents
The report also reveals that average earnings are currently growing by around 4% a year, which is almost twice the rate of rental inflation. If maintained, it would mean that 2026 would be the third consecutive year in which wage growth has outpaced rent increases.
Zoopla expects rental inflation to remain between 2% and 3% for the remainder of 2026. It says increasing the supply of rental homes remains the most effective long-term route to improving affordability, as, currently, every region has fewer homes available to rent than before the pandemic.
