Zoe Alvarez
With rents rising at the highest rate in decades, many are wondering if rent prices will go down in 2025. As of June 2025, rent prices in the US are up 0.9% from last year, with the national average rent being $1,636 per month. In the UK, average private rents increased by 6.7% to £1,344 a month in the 12 months leading up to June 2025. While rent increases have begun to plateau, various forecasts and trends indicate that rent prices will continue to rise in 2025 and beyond.
| Characteristics | Values |
|---|---|
| Rent prices in 2025 | Rising |
| Average rent in the US | $1,636 per month |
| Year-over-year increase in rent prices | 0.9% |
| States with the largest rent increases | Illinois, North Dakota, Rhode Island |
| States with the lowest rent prices | Oklahoma, West Virginia, Arkansas |
| Average rent in Oklahoma | $903 per month |
| UK rent prices | Rising |
| Average private rents in the UK | £1,344 a month |
| Annual increase in UK rents | 6.7% |
| Average rents in England | £1,399 a month |
| Average rents in Wales | £804 a month |
| Average rents in Scotland | £999 a month |
| UK inflation rate | 3.6% |
| UK wage growth | 5.3% |
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What You'll Learn
Rent prices in the US
Firstly, the rate of rental price growth has slowed since 2022. Secondly, a "robust multifamily construction pipeline" is expected to continue driving rental supply growth in 2025, which is likely to push the vacancy rate back towards its long-term average. This increase in supply has already led to a "'renter's market'" in 2025, with property managers lowering their asking prices to attract tenants.
However, this renter-friendly market is not expected to last. With construction activity of multifamily housing slowing down, rents will likely start increasing again after 2025. Experts predict that median rents for 2025 will be 4.8% higher nationally than in 2024. Studio apartments are projected to see the largest increase, with rents rising 5.9% to a median of $1,384. One-bedroom units will see a 5.3% increase, while two-bedroom units are expected to rise by 4.8%. Larger rentals will see smaller increases, with median rents for three-bedroom homes projected to grow by 4.4%, and four-bedroom homes by 4.1% to $2,681.
At the state level, Rhode Island (-4.8%), Wyoming (-4.1%), and South Dakota (-4.0%) are reporting the largest decreases in rent for 2025. At the metro level, Santa Maria-Santa Barbara, CA, is projected to experience the sharpest drop of any market in the country, at -15.1%, after a major surge in rent and housing prices during the COVID-19 pandemic.
Despite the overall national increase in rent prices, some metropolitan areas are bucking the trend. Austin, Texas, for example, has seen a lot of new supply added to its rental market, causing rent prices to fall by 2.9% from the previous year. However, supply-constrained metropolitan areas like Seattle, Washington, D.C., and New York City are experiencing high rent growth of 5% annually.
The decision between renting and buying depends on individual priorities. For those looking to start a family and put down roots, buying may be preferable despite the higher costs. On the other hand, renting offers more flexibility and is currently more affordable than buying due to high mortgage rates.
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Rental market outlook
The rental market outlook for 2025 varies across different countries and regions. Here is an overview of the rental trends and predictions for various locations:
United States
In the United States, rental prices are expected to continue rising in 2025. According to CoStar Group, key indicators such as the national vacancy rate and construction starts suggest a potential undersupply in the market. The sharp decline in construction starts from 210,000 units in Q1 2022 to 63,000 units in Q1 2024 could lead to a quick transition from an oversupplied to an undersupplied market, causing vacancy rates to drop and rent growth to accelerate above historical averages.
As of June 2025, the national average rent in the US was $1,636 per month for a one-bedroom apartment and $1,896 per month for a two-bedroom, an overall increase of 0.9% since last year. However, rent increases and vacancy rates have begun to plateau, indicating a potential deceleration in summer moves.
Some states experiencing the largest rent increases include Illinois, North Dakota, and Rhode Island, while states with the lowest rent prices include Oklahoma, West Virginia, and Arkansas.
United Kingdom
In the United Kingdom, rents are also rising at the highest rate in decades. According to the Office for National Statistics (ONS), average private rents in the UK increased by 6.7% to £1,344 per month in the year up to June 2025. London renters are facing even higher increases, with rents 7.3% higher than in June 2024, reaching an average of £2,252 per month. The London borough of Kensington and Chelsea has the highest average rent in the UK at £3,616 per month.
While the rate of rent increases has slowed slightly in recent months, with a 6.7% increase recorded up to June 2025 compared to 7% in May 2025, rents are still outpacing inflation and wage growth. This has created an affordability crisis, with tenants paying around £84 more per month on average than they were a year ago.
In summary, the rental market outlook for 2025 indicates continuing rent increases in the US and the UK, with potential variations across different regions and cities. While there are some signs of a deceleration in rent growth and a plateauing of vacancy rates, overall, renters can expect to face higher rental prices in the coming months.
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Rental prices in the UK
However, there are signs that rental inflation is slowing across all regions and countries of the UK. The rate of increase has been falling in recent months, and the surge in UK rental prices over the past four years appears to have ended. For instance, in Yorkshire and the Humber, rental growth has weakened, with rents in cities like Sheffield, Bradford, and Leeds falling compared to the previous year.
The imbalance between the demand and supply of rental properties has narrowed, according to Zoopla. Nevertheless, the number of available rentals at the end of 2024 was still 18% lower than before the COVID-19 pandemic. This shortage of rental stock, particularly in London, is expected to delay any significant decrease in rental prices.
The affordability of rentals is a pressing issue. The gap between wages and rent growth has created an "affordability gap" of £720, according to Felicia Odamtten, an economist at the Resolution Foundation. While wages have risen by 18.6% since May 2022, private rents have grown by 24.2%. As a result, tenants across the UK are paying around £84 more per month than they were a year ago.
The government is expected to introduce reforms to improve the situation for renters. The Renters' Rights Bill, which may become the Renters' Rights Act in 2025, aims to address issues such as the eviction process and fixed-term tenancies. Additionally, the Labour government is committed to tightening regulations on holiday homes and short-term lets.
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Rental prices in specific US states
While the rental market in the US has seen continued price increases, with a national average increase of 4.8% expected in 2025, some states and cities are experiencing a decline in rent prices.
States with declining rent prices
Rhode Island, Wyoming, and South Dakota are the US states reporting the largest decreases in rent for 2025, with decreases of 4.8%, 4.1%, and 4.0% respectively.
Cities with declining rent prices
Santa Maria-Santa Barbara, CA is projected to experience the sharpest drop in rent prices across the country, with a decrease of 15.1%. This decline follows a major surge in rent prices during the COVID-19 pandemic.
Austin, Texas, has also seen a significant decline in rent prices, with a year-over-year drop of 8.8% in May 2025, the largest decline among 44 major US cities analyzed by Redfin. This decrease can be attributed to the addition of new supply to the city's rental market, as well as the completion of multifamily housing units.
Other cities that have seen rent decreases include Minneapolis (-6.3%), Columbus, OH (-3.5%), Nashville (-3.4%), and Portland, OR (-3.4%).
Factors influencing rent prices
The decline in rent prices in some cities and states can be attributed to various factors, including policies aimed at deregulating the housing industry and streamlining construction processes. Additionally, the completion of multifamily housing units and the increase in housing inventory have contributed to driving rent decreases in certain areas.
On the other hand, some cities with supply-constrained metropolitan areas, such as Seattle, Washington, D.C., and New York City, continue to experience high rent growth of about 5% annually.
While rent prices in some areas are declining, overall, the rental market in the US is still facing challenges due to the increasing costs of construction, materials, labor, and property insurance, making it challenging for landlords to keep rents affordable.
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Rental prices in specific UK regions
Rental prices in the UK have been surging in recent years, with rents rising at the highest rate in decades. However, there are signs that the rental market is beginning to cool, with rental inflation returning to pre-pandemic levels. According to Zoopla's Rental Market Report for June 2025, rental inflation has slowed across all regions and countries of the UK.
London
London has seen some of the fastest increases in rents over the past few years. As of June 2025, rents in London were 7.3% higher than in June 2024, with an average rent of £2,252 per month. The London borough of Kensington and Chelsea has the highest average rent in the UK, at £3,616 per month. London is expected to continue experiencing moderate growth in rental prices driven by sustained demand and economic factors.
North East England
The North East of England has seen the fastest rental growth across the UK, with rents increasing by 5.3% in the 12 months to April 2025. The North East also has the lowest average rents in England, at £734 per month.
Yorkshire and the Humber
Yorkshire and the Humber have the lowest rental growth rates in the UK, with rents increasing by just 1.1% in the 12 months to April 2025. In university cities like Sheffield, Bradford, and Leeds, rents have fallen compared to the previous year.
Scotland
Scotland has seen a sharp slowdown in rental inflation, dropping from 9.1% to 2.4% in the last year. This is partly due to the removal of limits on rent increases within tenancies, reducing the pressure on landlords to secure high rents on the first day of a new tenancy.
While the rental market is showing signs of cooling, it is essential to note that rents are still outpacing wage growth and inflation, putting a strain on renters, especially those on low incomes. With the cost of living crisis continuing to impact households, renters may face ongoing challenges with rising rents.
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Frequently asked questions
While rent prices in the US have been increasing, they have begun to plateau, suggesting a deceleration in summer moves. In June 2025, the national average rent was $1,636 per month, an increase of 0.9% since last year. However, some cities, like Naples, Florida, have seen rent decreases.
If demand remains at current levels, the market could transition from oversupplied to undersupplied, causing vacancy rates to drop and rent growth to accelerate above historical averages. This means that rent prices are expected to continue to increase in 2026.
Key factors influencing rent prices include the national vacancy rate, construction starts, and demand. For example, a sharp decline in construction starts can lead to a supply shortage, causing rent prices to increase.
