While rent inflation for the UK as a whole slowed to 2.1%, growth in areas where rents are an average of £750 per month or less increased by 5% year on year.

At the same time, demand for rented homes has fallen to its lowest level for six years, with the average number of enquiries per rental listing dropping to 5.6 in May, down from a peak of almost 16 in 2022.

Zoopla found that in more expensive markets, rents are being constrained by limits on what tenants can afford, but a lack of supply in lower-cost locations is pushing rents higher.

The fastest rental growth was recorded in Carlisle, where rents rose 9.1%, followed by Kilmarnock at 9% and Halifax at 6.5%.

In contrast, rents fell in several larger markets, including Bournemouth, down 1.7%, Nottingham, down 1.5%, and Birmingham, down 1.1%.

Despite stronger growth, rents in the fastest-rising markets remain well below the national average.

Average rents in Carlisle, Kilmarnock and Halifax are around £700 per month, around 45-50% lower than the UK average.

Nationally, rental inflation eased to 2.1% from 2.6% a year earlier.

Average earnings are currently rising by 4% annually, meaning wage growth has outpaced rental inflation for the past 18 months.

However, supply remains constrained as in every UK region and country there are 20-30% fewer homes available to rent than before the pandemic.

London remains an exception to wider market trends.

The capital was the only region to record an increase in rental demand, with enquiries up 6% year on year.

Zoopla says that higher mortgage rates are keeping would-be first-time buyers in the rental market longer, pushing rental inflation in London to 2.2% from 1.9% a year ago.

Average rents in the capital now stand at £2,206 per month.

Zoopla expects rental inflation to remain between 2% and 3% for the rest of 2026 but warns that affordability gains could prove fragile unless more rental homes come to market.

Zoopla executive director Richard Donnell says: “We’re seeing a split in how different regions and cities are responding to changes in the supply and demand for rented homes.

“Our latest report shows just how fast the gap in rents is closing between more affordable regions and major cities where rents are highest.

“Rent inflation is more subdued across most of the UK’s major cities due to already stretched affordability levels for renters.

“While demand for renting is at its lowest level for six years, low levels of new investment in private rented housing means an ongoing scarcity of homes for rent which is keeping upward pressure on rents.

“It’s positive that earnings continue to grow faster than rents at a national level but the experience of renters in local areas varies widely and is a challenge for lower-income renters.

“Growing the supply of rental homes is the single most effective way to improve affordability for private renters, particularly those in traditionally more affordable areas who have the fewest choices and are facing the sharpest increases.”

Lettings Advice Service founder Julie Ford says: “The rental market is settling into a more sustainable rhythm, with enquiries per property easing far below the recent peak in demand.

“This isn’t a sign of falling demand, tenants still need homes, but many are choosing stability under the Renters’ Rights Act, reducing churn rather than reducing need.”

Propertymark chief executive Nathan Emerson says: “While it is positive to see rental growth slowing nationally and wage growth beginning to outpace rent increases, these figures demonstrate that affordability pressures have not disappeared.

“In many areas where rents have traditionally been lower, demand remains strong and limited housing supply is pushing prices upwards at a faster rate than the national average.

“The underlying issue remains a chronic shortage of rental supply.

“Propertymark’s own member data consistently shows that prospective tenant demand continues to outstrip available stock, and despite some easing in competition, there are still far too few homes available to meet housing need.

“This is particularly evident in lower-cost locations where renters often have fewer alternatives and less flexibility when prices rise.

“To improve affordability and provide greater choice for renters, we need to see increased investment in the private rented sector, greater confidence among existing landlords to remain in the market, and a sustained increase in the supply of homes available to rent.”