"A month on from the introduction of the Renters' Rights Act, it's clear the market is still recalibrating"
- William Reeve - Goodlord
Rental inflation in England held at 1.7% in May 2026, matching April's figure and remaining at its lowest level in ten months, according to the latest Goodlord Rental Index.
The data, drawn from thousands of verified tenancy transactions each month, tracks actual rents paid rather than listing prices or advertised estimates. Confirmed tenant contracts form the basis of the figures, stripping out any aspirational pricing from the calculations.
Annual rental inflation at lowest level in ten months
The average cost of a rental property in England reached £1,211 in May, just 1.7% above the £1,191 recorded in May 2025. For the second consecutive month, rental inflation came in at less than half the 3.6% annual increase seen during the same period last year.
April's figure marked the smallest year-on-year rent rise since July 2025, and May's continued low inflation reinforces the picture of a market that has cooled considerably in recent months. Rental inflation is now running well below both the Consumer Price Index, which fell slightly to 3% in April, and wage growth, which stood at 3.4% in the same month.
Despite house building running behind target, net migration fell to its lowest level since 2012 last year, a factor likely contributing to reduced pressure on rents.
Rents begin to bounce back after April price drop
After April saw rents fall for the first time this year, to £1,205, May brought a modest recovery. The 0.5% monthly rise pushed average rents back to £1,211, though they remain fractionally below the £1,212 recorded in March. That makes 2026 the first year since the Covid-19 pandemic disrupted the market in 2020 that rents in May have been lower than they were in March.
Much of the nationwide monthly increase was driven by a sharp rebound in Yorkshire and the Humber and the North East. The North East, which saw rents fall 4.9% in April, recorded a 5.5% rise in May. Yorkshire and the Humber followed a similar pattern, dropping 2.8% in April before bouncing back 3.2% in May. Greater London, the South East and the West Midlands all posted marginal monthly gains, while the East Midlands, East of England, South West and North West each recorded month-on-month falls.
The April-to-May increase of 0.5% compares with a 2.1% rise over the same period in 2025, further underlining the sluggish pace of growth seen throughout 2026 so far.
London leads the way again
Greater London recorded the highest annual rental inflation of any region in May, with rents up 5.6% year-on-year, rising from £2,077 to £2,194. The capital also topped the regional charts in April, when it posted 4.8% annual growth. Construction is a key factor: London built just 7% of the 88,000 homes it was targeting last year, compounding supply constraints in the market.
Across the North of England, rental inflation had been running well ahead of other regions through the first quarter of 2026. After cooling in April, the North East, North West and Yorkshire and the Humber posted annual figures of 3.9%, 1.6% and 3.2% respectively in May. The East Midlands, which recorded 4% annual growth in April, saw that figure drop by 1 percentage point in May. Rents continued to fall year-on-year in the South West, down 0.4%, and the East of England, down 1.5%.
"A month on from the introduction of the Renters' Rights Act, it's clear the market is still recalibrating," said William Reeve, chief executive of Goodlord.
"Whether the new legislation will bring the widespread disruption and price volatility many have predicted remains to be seen. Nonetheless, the overall picture is one of a rental sector that has fundamentally changed.
"While average prices have recovered slightly from their drop in April, this is the first time since 2020 that rents in May have been lower than they were in March.
"These figures reflect a market being pulled in two directions: on one hand, reduced net migration is easing demand-side pressure; whilst the Renters Rights Act and continued underdelivery in housebuilding particularly in London, is constraining supply on the other. How these forces play out over the coming months will be critical in determining the trajectory of rental prices."
