The answer is nuanced. While the pace of growth may stabilise, the fundamental pressures driving rental inflation remain in place. Our latest guide explores national data, economic drivers and regional trends — with a specific focus on high-demand North West locations such as Preston, Lancaster, Blackpool and Morecambe.

Insights are supported by data from the Office for National Statistics, Zoopla Rental Market Reports, and Rightmove Rental Tracker.

UK Rental Market Overview: Where Are We Now?

Late 2025/early 2026, rental prices across the UK remained near record highs. According to ONS data, average UK private rents have continued to rise year-on-year, although the rate of increase has begun to slow compared to the sharp spikes seen in 2022–2024.

• Annual rental growth has remained positive across most regions
• Tenant demand continues to exceed available supply
• Void periods remain historically low in high-demand areas

Zoopla reports that rental demand is still significantly above pre-pandemic levels, even as affordability pressures begin to influence tenant behaviour.

Why Rents Have Risen So Sharply

The rental surge has not been driven by a single factor. Instead, it is the result of multiple structural pressures combining at once:

• Landlord exit from the market due to tax changes and regulation
• Higher mortgage costs, passed on through rents
• Limited new housing supply failing to meet demand
• Population growth and household formation

Government policy has also played a role. Regulatory changes affecting landlords have reduced the number of rental properties available, tightening supply further.

For landlords navigating these changes, our 2026 landlord compliance guide outlines key legal updates.

Rental Forecast for 2026: Growth Slows, But Continues

Looking ahead, most analysts expect rental growth to continue — but at a slower, more sustainable pace.

Projected Rental Trends for 2026

• 3%–6% annual rental growth nationally
• Slower increases in high-cost regions
• Stronger growth in affordable regional markets

Rightmove data suggests that affordability ceilings are beginning to cap extreme growth, but this does not remove upward pressure — it simply moderates it.

For a broader outlook, see our UK Rental Market Outlook 2026.

North West Rental Market: Why Demand Remains Strong

The North West continues to outperform many regions due to a combination of affordability, employment growth and strong tenant demand.

Key locations include:

• Preston – strong student and professional rental demand
• Lancaster – university-driven demand and limited supply
• Blackpool – high yield potential with consistent tenant turnover
• Morecambe – growing interest due to regeneration and coastal relocation trends

These areas offer a combination of lower entry prices and strong rental demand — a key reason investors continue to target the region.

Explore lifestyle and location benefits in our Lancaster guide.

Supply vs Demand: The Core Issue Driving 2026

The fundamental imbalance between supply and demand remains the single biggest driver of rental growth.

Rightmove data shows:

• Multiple applicants competing per property in many regions
• Properties letting within days of listing
• Limited stock entering the rental market

This trend is particularly evident in commuter towns and university cities, where demand is structurally high.

See how this plays out regionally in North West rental demand analysis.

Tenant Affordability: The Key Limiting Factor

While rents are still rising, tenant affordability is beginning to act as a constraint.

ONS data shows that rent as a percentage of income has increased significantly, particularly in urban areas.

• Tenants are becoming more selective
• Demand is shifting toward better-value locations
• Shared housing and HMOs are increasing in popularity

This is one reason why regions like Preston and Lancaster continue to see strong demand — they offer better affordability compared to southern markets.

Investor Outlook: Are Buy-to-Let Opportunities Still Strong?

Despite regulatory challenges, the rental market still presents strong opportunities for investors — particularly in regions with:

• Lower purchase prices
• High tenant demand
• Strong yields

North West towns continue to meet these criteria, especially when compared to London and the South East.

For deeper investment insights, see assessing rental property potential and portfolio strategy guide.

Coastal & Lifestyle Trends Influencing Rental Growth

One of the more interesting shifts heading into 2026 is the continued rise of coastal and lifestyle-driven relocations.

Morecambe and Blackpool, in particular, are benefiting from:

• Increased remote working flexibility
• Lower living costs
• Regeneration investment

This trend aligns with findings in coastal relocation forecasts.

Will Rents Keep Rising in 2026?

The evidence suggests that rents will continue to rise in 2026, but at a more measured pace than in recent years.

The key drivers — limited supply, strong demand and economic pressure — remain firmly in place. However, affordability constraints will prevent extreme spikes.

Stability With Continued Upward Pressure

The UK rental market is entering a more balanced phase — but not a declining one.

For tenants, this means continued competition and the need to act quickly. For landlords and investors, it presents ongoing opportunity — particularly in high-demand regional markets.

Understanding local conditions remains critical. Areas such as Preston, Lancaster, Blackpool and Morecambe are not just following national trends — they are often outperforming them.

To explore rental opportunities or get tailored advice, speak to your local team at Farrell Heyworth today.

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.