Cooling Rents: UK Rental Market Update (18 December 2025)

This week’s headlines point to a housing market that is cooling after a chaotic year. Sales agents are increasingly confident about instructions returning in the new year, while lettings agents remain cautious as rental growth slows and demand softens. Official data from ONS and Zoopla confirm easing price and rent inflation, even though affordability pressures persist. At the same time, the Renters’ Rights Act continues to reshape the sector, with new civil penalty guidance signalling a tougher, more structured enforcement environment for landlords and agents.

The Top Headlines

1) Sales and lettings agents split on confidence in the property market

A new industry survey shows a growing divide between sales and lettings agents on market confidence. Sales agents are confident instructions will increase in the new year, with almost a third describing themselves as 'very confident'. In contrast, lettings agents are more pessimistic about 2026, with only 31% expressing optimism. Source

2) Zoopla: rental growth cools as supply improves and demand softens

Zoopla’s latest rental market update reports annual rental growth slowing (to around 2.2%). This can be attributed to a rise in listings (around 15% more rental homes than last year) and slow demand at this time of year (the lowest for 6 years). This suggests a more balanced market emerging in some areas - though affordability pressures remain elevated. Source

3) UK house price growth and rent inflation both slow (ONS)

ONS figures show UK house prices rose 1.7% year-on-year in October (slowest since Sept 2024), while private rents rose 4.4% in the year to November — down from 5.0% in October. The data reinforce a “cooling” story across both sales and lettings after a volatile year. Source

4) Renters’ Rights Act: updated civil penalties guidance remains the key compliance roadmap

GOV.UK guidance sets out how councils can apply civil penalties across a wide range of offences linked to the Renters’ Rights Act and other housing legislation. It’s increasingly being treated as the practical “rulebook” for how enforcement will work in reality as the Act rolls out. Source

Why this matters

Slower rent growth and rising supply mean landlords can no longer rely on demand alone and must focus on pricing, standards and compliance. For agents, tighter enforcement and a more balanced market increase the value of efficient management and strong regulatory expertise.