Rental prices - a deep dive into current trends
Current inflation data
Private rented sector rents (PIPR, UK): 3.3%
Wider price indices – including housing costs (CPIH, UK): 3.0%
Most widely used measure of inflation (CPI, UK): 2.8%
However, as our recent analysis of price change showed, rental prices since January have risen by less than the wider indices:
Summary of research
This blog post digs beneath the headline measures.
The evidence leads to the conclusion that:
- The rental market in London is driving headline measures of national rental inflation.
- Private rental prices are at present decoupled from wider economic price changes.
- Finally, in London, structural change - a consequence of long-trailed rental reform (and not just the more recent implementation of legislation) may now be squeezing rents higher. Ths may be a pattern of change which will have an impact in other regions in the near future.
Review of previous analysis
NRLA-Research’s piece, Rents, Which Way Next? Published late in 2025 showed:
- Annual private rent increases experiencing a sustained fall.
- A convergence between private rental price increases and wider price indices.
- In Wales, despite sustained falls in the headline rate, rental price increases continue to outstrip wider inflation.
- Different patterns of rental price change between London and (to a lesser extent the South East) and the other English regions.
- An indication that, despite the afore mentioned fall in the annual headline PIPR rate, there were indications (in November) that rental prices could be on an upward turn.
Six months on, this post revisits these conclusions.
Recent trends
Table 1 below maps the recent annual "headline" increase in the Price Index of Private Rents (PIPR) - the ONS's assessment of rent inflation in the Private Rented Sector (PRS).
The dotted line is the last date recorded when a similar analysis was presented in the NRLA paper Rents: Which Way Next? (see above for a link)
Chart 1: Annual rates CPI & PIPR, monthly, Feb 2025-May 2026
The above chart shows the annual increase in rental prices compared to the CPI.
Since December, the annualised PIPR change has fluctuated rather than continue the previous downward path. April saw the first increase in the annual UK-PIPR rate since November 2024.
Quarterly-based analysis
The chart below uses quarterly calculations (from the beginning to the end of each quarter) to highlight more recent trends:
Chart 2: Quarterly changes in prices compared
The chart shows no clear direction in rental prices – the final quarter of 2025 saw a smaller increase in rents than the previous quarter, and then the first quarter of this year was another higher increase.
The most notable aspect of the additional two quarters of data is the leap in wider prices (CPI), primarily a consequence of the military tension in the Middle East. How this feeds through into wider prices and costs – and in turn interest rates and rents – is the great uncertainty in any analysis.
The regional dimension
The final chart, Chart 3 below, shows some astonishing data from the last two quarters. Using data from the ONS the NRLA has calculated rental price growth in 2025 Qtr4 and 2026 Qtr1. The chart also displays changes in the CPI (which is again an NRLA calculation):
Chart 3: Recent rental price changes in English regions & Wales
The data on the left-hand side of Chart 3 clearly shows rental price growth increasing at a national (be that UK. England or Wales) level in the first quarter of this year. It would be easy to look at the left-hand side of the chart and assume rental change is a consequence of wider economic price change – and the unusual factors which came into play at the start of 2026.
However, were macro-factors (such as the effects of military action) the driver of price increases in any given sector a main cause, then one could anticipate at least some uniformity in increase across the country.
The analysis shows that, across every English region (including Yorks & The Humber – where rounding masks a slight reduction), rental price increases fell in the second period compared to the first. This does not mean price reductions, but slower price rises.
The sole – and very notable - exception to this pattern of regional softening of prices is London.
In the capital, rental price growth is accelerating - and doing so at a rate above inflation: In 2025 Qtr4 London was the only region in which rental price growth was less than CPI inflation. In the very next quarter however, rental price growth in the capital leapt.
It is impossible to draw a conclusion other than the rental market in London is presently driving national rental price inflation.
Summary
In the last deep dive into inflation, it was noted that whilst rents were climbing more rapidly in the English regions, there was a sharp decrease in inflation in London.
The conclusions at that time included: “At present, landlords [in London] are ‘hunkering down,’ minimising rent change to retain good tenants….in preparation for forthcoming reforms.”
Six months on, and analysts could use the above passage describing landlord motivation in London in 2025 to now describe landlord action in the other English regions.
In London meanwhile, with a sell-off in rental property now beyond dispute an accompanying upward squeeze on rents is now taking place.
The NRLA’s conclusion in that blog post “What may be emerging is a more fragmented, more complex PRS marketplace with 'headline' rental growth masking more nuanced patterns of rental growth between regions.” remains true.
What is also true is that rental price growth and inflation remain – for now - decoupled.
