UK Rental Market Outlook 2026: National Trends & North West Growth Analysis

Our latest blog post combines the latest data from the Rightmove Rental Trends Tracker, the ONS Private Rental Price Index, UK Finance lending statistics and monetary policy insight from the Bank of England to provide a complete national picture — before examining what it specifically means for the North West and key locations including Preston, Lancaster, Blackpool and Morecambe.

National Rental Growth: Cooling From Peak, Not Reversing

According to Rightmove's Q4 2025 Rental Trends Tracker, average advertised rents outside London rose 2.2% across 2025, reaching £1,370 per calendar month.

While Q4 recorded a 1.1% quarterly dip, annual growth remains positive and Rightmove forecasts a further 2% national rent increase during 2026.

The ONS Private Rental Price Index confirms this broader moderation trend, showing annual UK rental inflation slowing compared to 2023 highs, but remaining above long-term averages.

This reflects a market moving from rapid acceleration to controlled growth — a sign of structural supply imbalance rather than demand collapse.

Tenant Demand: Lower Than Peak, Still Historically Elevated

Tenant competition remains above pre-pandemic norms.

Nationally:

• 10 enquiries per rental property in 2025
• 14 enquiries per property in 2024
• 6 enquiries per property in 2019

This confirms that although pressure has eased, rental demand remains structurally strong relative to available supply.

Urban employment hubs, university cities and affordable regional markets continue to experience the strongest enquiry volumes.

Broader market behaviour is explored further in UK Property Market Forecast for 2026.

Supply: The Structural Constraint Driving 2026

The number of rental properties available nationally is now 9% higher than a year ago — yet remains approximately 33% below levels seen ten years ago.

This decade-long contraction in rental stock is the core reason rents remain elevated.

Policy uncertainty, taxation changes and evolving regulation — including developments covered in New 2026 Laws for Self-Managing Landlords — have influenced landlord exit decisions in recent years.

However, new buy-to-let activity is rising again.

UK Finance reports:

• – 13% increase in new buy-to-let purchase mortgages
• – 23% increase in landlord remortgages

With two-year buy-to-let rates falling below 5% for many borrowers, improving finance conditions may stabilise supply in 2026.

Mortgage Rates and Inflation: Why 2026 Looks More Predictable

The Bank of England's efforts to return inflation towards its 2% target are gradually reducing pressure on borrowing costs.

While mortgage rates remain higher than ultra-low pre-2022 levels, the volatility that characterised 2023–2024 has largely subsided.

This greater stability supports both landlord retention and cautious expansion.

For landlords assessing long-term strategy, see Building a Property Portfolio: Strategies for Long-Term Success.

Yield Performance Across England

Average gross rental yields outside London currently sit at approximately 6.3%.

London yields average closer to 5.7%, reflecting higher capital values and lower percentage returns.

However, certain northern regions significantly outperform these averages — particularly the North West.

The North West Rental Market: Outperforming the National Average

The North West recorded annual rent growth of approximately 3.6% in 2025, above the national average.

Average asking rent across the region reached £1,224 per calendar month, with average yields of approximately 7.2% — among the strongest in England.

This yield premium is a major reason why investor demand continues to focus on the region.

Preston: High Growth and Regeneration Momentum

Preston recorded rental growth of over 10% year-on-year in late 2025, reflecting strong tenant demand, university influence and continued regeneration.

Infrastructure, student demand and employment growth have positioned Preston as one of the North West's strongest performing rental markets.

Local insight is available via Preston Estate Agents.

Further economic context can be found in How Preston's Housing Market Is Leading the Way.

Lancaster: University Stability and Long-Term Demand

Lancaster benefits from a dual market of academic demand and professional commuters.

The presence of Lancaster University provides consistent rental resilience even during national slowdowns.

Explore local trends via Lancaster Estate Agents.

Investment fundamentals are examined in Living and Investing in Lancaster.

Blackpool: Yield-Focused Opportunities

Blackpool continues to attract yield-driven landlords due to lower entry prices and strong tenant demand.

While capital growth may be more measured than larger cities, gross yields often exceed national averages.

Local branch insight is available via Blackpool Estate Agents.

Market context is discussed in Beyond the Beaches: Blackpool.

Morecambe: Regeneration and Lifestyle Migration

Morecambe's regeneration projects and coastal lifestyle appeal are influencing both sales and rental demand.

The Eden Project North and infrastructure investment continue to shape the long-term outlook.

Explore local opportunities via Morecambe Estate Agents.

Long-term investment perspective is detailed in Morecambe's Revival.

2026 Forecast: What Landlords Should Expect

Nationally, rents are forecast to rise approximately 2% during 2026.

Growth is expected to be steadier and more sustainable than recent years, with competition normalising but remaining above historical averages.

In the North West, yields are likely to remain structurally attractive relative to southern England.

For landlords debating management structure in this new environment, see Self-Management vs Letting Agent: What's Right for You?.

A Market Resetting to Stability

The UK rental market in 2026 is not cooling into weakness — it is resetting into stability.

Supply constraints remain the defining factor nationally.

Mortgage affordability is improving.

Tenant demand remains structurally elevated.

And in regions like the North West — particularly Preston, Lancaster, Blackpool and Morecambe — yields continue to outperform the national average.

For landlords seeking long-term sustainable returns rather than short-term spikes, 2026 represents a period of strategic opportunity.

About the Author

Laura Gittins is the PR & Marketing Manager at Farrell Heyworth, specialising in market commentary, regional housing insights and consumer guidance. Laura works closely with internal teams and industry partners to deliver trusted updates on the North West property market. Connect with her on LinkedIn.