Zoopla warns UK rent prices are set to keep rising and higher mortgage costs to blame

Zoopla warns UK rent prices are set to keep rising and higher mortgage costs to blame Zoopla has warned that higher mortgage rates are impacting the number of homes to rent that are available, and this reduced supply is affecting rental costs UK rental costs are set to keep rising over the coming months in bad news for millions of tenants. Zoopla has warned that higher mortgage rates are impacting the number of homes to rent that are available, as would-be first-time buyers are having to stay renting for longer. The property website estimates there are 3% fewer homes available than a year ago and this reduced supply is pushing up rental costs. Zoopla says average rental costs for new tenancies were up 2.6% in July compared with a year earlier - but it now expects UK rental prices will rise by 4% to 5% annually by the end of the year. The average rent now stands at £1,340 a month. Zoopla says the number of homes available for rent started to fall in May 2026 - but it argues that higher costs are not down to the Renters' Rights Act. The Renters' Rights Act only applies in England but Zoopla data shows Scotland is experiencing the same trends of fewer homes for rent. 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." London and the Yorkshire and Humberside regions have seen the biggest increase in rental growth over the last year, according to Zoopla. The data shows both areas recorded an above average drop in the number of homes for rent, down 6% and 12% respectively. It means the average London buyer needs to find an extra £35,500 for their deposit to offset the higher mortgage rates introduced this year, nearly double the £18,200 needed nationally. In contrast, Wales has seen the sharpest slowdown in rental growth due to a 7% increase in the number of homes for rent, boosting choice for renters.