Delay in the British rental market faster than expected: Hamptons

Rental prices on newly rented property rose in June only 0.4%on an annual basis in the United Kingdom, the weakest growth since August 2020m with decreases listed in London (-2.5%), Wales (-0.9%) and Scotland (-0.5%).

The demand for the tenant was mitigated, with 11% falling in the first half of 2025 compared to the same period in 2024 and 20% under 2019. These figures owe much to the falling mortgage interest that tenants have helped to buy their own home.

Hamptons suggests that despite the short -term coolingStructural delivery shortages and upcoming legal changes, including the bill of the tenants and EPC, is expected to keep an upward pressure on rental prices in the medium term.

However, a weaker labor market forecast is expected to reduce growth by 0.5 percentage points every year. This means that Hamptons now expects the rents to rise by 3.5% in the year until December 2026 and 3.0% in 2027.

Responding to the latest figures and Hampton’s head of research Aneisha Beveridge said: “The rental market was softened faster than we had expected at the end of last year. What initially seemed to be a delay -oriented delay is now spread throughout the country, where the rental prices fell in several regions and growth that lay elsewhere.”

She added that more prosperous tenants first became buyers, while the economic delay was limited what others could afford.

But Beveridge emphasized that this was not the end of the rental story. “The structural shortage of rental properties remains unsolved and upcoming legal changes, such as the bill of the tenants and new EPC, will probably further limit the offer and contribute to the costs of landlords.”

“A delay in the development of Build-to-interest this year is also expected to lead to fewer new rental homes that enter the market in the coming years. This pressure will continue to support rental growth in the medium term, even if the market again calibrates.”