Zoopla expects UK rental price growth to accelerate by end of 2026
(Alliance News) - Higher mortgage rates are putting pressure on the rental sector, with UK rental prices expected to be increasing by 4% to 5% annually by the end of the year, according to a property website.
Zoopla said that demand for rental homes has increased in recent months as higher mortgage rates have kept some people renting for longer.
It said the supply of homes coming on the market to rent has also been sitting lower than in 2025 in recent months.
UK rental prices increased by 2.6% annually in July, accelerating from 1.6% in February 2026, Zoopla said, with the average rent standing at GBP1,340 a month.
Richard Donnell, executive director at Zoopla, said: "The rental market is starting to tighten again after three years in which the supply of homes for rent has steadily improved and rental growth slowed, easing the pressure on renters.
"Our latest report shows how sensitive the rental market is to even modest changes in how many homes are available for rent.
"Higher mortgage rates are not just impacting the sales market, they are keeping more would-be first-time buyers in rented homes for longer, reducing available supply just as the seasonal upturn in demand gets into full swing.
"This is pushing rents higher again, mainly in regions where the availability of homes for rent has declined the most, although affordability remains an important constraint on how far rents can rise.
"The upward pressure on rents is greatest in London, where higher mortgage rates have had the biggest impact on home buyers, and in more affordable rental markets where renters have greater capacity to absorb increases.
"Low levels of new investment by landlords and renters renting for longer mean we expect UK rents to increase by four to 5% by the end of the year.
"Growing the number of homes for rent through increased investment is the most sustainable route to boosting choice for renters and ensuring stability in rent levels over the long run."
By Vicky Shaw, Press Association Personal Finance Correspondent
Press Association: Finance
source: PA
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