Rents rose by 2% in the twelve months to December, according to Goodlord’s latest rental index.
However, Goodlord’s data shows that the annual increase in inflation is lower than the year-on-year rental inflation recorded in December last year and well below the 4.6% recorded in both January and March 2025.
Average rents also reached their lowest level since March in December, down 2.5% compared to November, according to month-on-month figures.
Meanwhile, rental price averages fell to a nine-month low of £1,214 across England in December.
This compares to the average of £1,245 in November, which equates to a drop of £31 per month, or £372 per year.
Rents have not been this low since March 2025, when they averaged £1,213 per property per month.
The biggest shift in month-on-month rental costs was seen in the Southwest, where prices fell 4% in December.
The only region to record an increase in rental costs was the North West, where a very small increase of 0.3% was recorded.
Last year’s average rents peaked in July at £1,496, which Goodlord says means rents ended the year 19% lower than the annual peak.
Data also showed that vacancy periods remained largely stable in December, ending the month with an average vacancy period of 23 days, just one day shorter than November’s average of 24.
Year-on-year, vacancies were longer in December 2025 compared to the same period the year before. In December 2024, an average of 21 days of vacancy were registered.
Good sir CEO William Reeve says: “We expect month-on-month price deflation in December – it’s typically one of the slowest times of year for the market – but what’s much more interesting is what’s happening in the year-on-year figures.”
“Despite ending the year with a 2% increase, December’s annual inflation rates are much lower than we have seen in previous years, and still lower compared to the 2025 inflation peak of 4.6%.
“While it is too early to say for sure whether this is a seasonal blip or the start of a cooler period of inflationary pressures, the broader signals indicate that 2026 will be another intense year for the market.”
“The Renters’ Rights Act comes into force in May, which could put further pressure on supply and demand if landlords decide to exit the market. The combination of the predicted summer surge plus the shift in the legislative landscape means we could be in for another record year.”