Rental inflation continued to track below broad inflation metrics in May as average rents continued to remain 1.7% higher than they were in the same area in 2025, the Goodlord Rental Index revealed.
Goodlord says the latest data suggests last month’s data was not a mistake. In comparison, last year to May 2025 rents were increasing by 3.6% per year.
In May, the average cost of a rental property in England was £1,211.
In the second month past, this represents just a 1.7% increase on the average price recorded in the previous 12 months, when rents stood at £1,191 per property.
This means that the rate of annual rent inflation in May is less than half that of the same month last year, when rents rose by 3.6% year-on-year.
The April figure marked the smallest annual rent increase seen since July 2025.
May’s continued inflation is further evidence of the cooling market in recent months.
The new data sees rent inflation continuing to stay well below both the latest figures for consumer inflation, which fell slightly to 3% in April, and wage growth, which stood at 3.4% in April.
After April saw prices fall for the first time this year, May’s figures show a slight rise in monthly rents to £1,211, representing an increase of 0.5%.
Despite this increase, average rents across England remain slightly lower than they were in March this year, when they stood at £1,212.
This makes 2026 the first year since Covid hit the market in 2020 that prices fell in May from two months earlier in March.
The national rent increase was due in large part to falling prices in Yorkshire and the Humber and the North East.
The North East fell by 4.9% in April, but this figure increased by 5.5% in May.
Meanwhile, Yorkshire and the Humber saw a 3.2% rise in May, recovering from a 2.8% fall in April.
Greater London, the South East and West Midlands all saw modest month-on-month rises, while rents in the East Midlands, East of England, South West and North West were lower in May than in April.
After recording the highest year-on-year rental inflation of any region in April, Greater London comes out on top again in May.
This comes as London shops build, with the capital building just 78,000 homes targeted last year.
Rents in the capital rose by 5.6% in the 12 months to May, from £2,077 to £2,194.
Inflation across the North of England was the highest price rise seen across the country in the first quarter of 2026.
After cooling off in April, May’s figures for the North East, North West and Yorkshire and Humber stood at 3.9%, 1.6% and 3.2% respectively.
Having seen annual growth of 4% year-on-year in April, the East Midlands recorded a 1% drop in annual income in May 2026.
Meanwhile, year-on-year employment in the South West (-0.4%) and East of England (-1.5%) continued to fall last month.
Goodlord’s chief executive, William Reeve, says: “Within a month since the Tenants’ Rights Act was introduced, it is clear that the market is still adjusting. Whether this new law will bring widespread disruption and price volatility that many have predicted remains to be seen.
“While prices have eased slightly from their decline in April, this is the first time since 2020 that rents in May were lower than in March.”
“These figures show that the market is being pulled in two directions: on the one hand, reduced immigration reduces the pressure on the demand side; while the Tenants’ Rights Act and the continued low delivery of housing, especially in London, pressures supply on the other. How these forces play out in the coming months will be important in determining the origin of rental prices.”
