New data shows that the rate of increase in private rents has more than halved over the past year, but regional pressures remain with tenant demand highest in the North East.

According to the Office for National Statistics (ONS), average monthly private rents across the UK increased by 3.3% in the 12 months to May this year – the date key provisions of the Renters’ Rights Act came into force in England.

However, the rate of increase is down from the 7% increase seen in the year to May 2025.

Supply and demand gap shrinking

It comes as analysis from the lettings platform, Zoopla, has shown that the gap between demand and supply in the rental market is shrinking nationally, with an average of just under six enquires per rental property, down from a peak of over 15 in 2022.

However, it warns that, despite the softening in demand the gap still exists – with new investment in private rented housing remaining low.

Regional fluctuations

The ONS figures also demonstrate a changing regional picture, with the rates of rent increases ranging from 2% in London through to 5.9% in the North East of England.

This underlines recent research, carried out on our behalf, suggesting that demand for rental homes is now by far the strongest in the North East.

Research published earlier this week by Hamptons suggests that the number of tenants who saw their rent increase in May this year was down 23% compared to the same point last year.

More rental homes needed

Chris Norris, our chief policy officer said: “Today’s data continues to point to a national rental market under less pressure, with the gap between demand and supply continuing to narrow.

“However, the national picture masks considerable regional variation. Tenants in the North East continue to face some of the biggest gaps between the homes they need and what is available to rent.

“The private rented sector has proved resilient in the face of strong headwinds of change, but the fact remains that we still need more rental homes alongside all other types of housing.

“Policy needs to reflect this, beginning with scrapping next year’s planned tax hike on rental income, the cost of which will ultimately be borne by tenants."