Rising mortgage rates are putting renewed pressure on the UK rental market, with experts predicting annual rent increases could reach 4% to 5% by the end of the year, according to property portal Zoopla. In July, the average rent across the UK rose by 2.6% year-on-year, up from 1.6% in February 2026, bringing the average monthly rent to £1,340. This increase comes as the supply of available rental properties has remained lower in recent months compared to the same period in 2025, contributing to a more competitive rental market. Richard Donnell, executive director at Zoopla, explained that the rental market is beginning to tighten again after three years of gradual improvement in housing supply and slower rent growth. He noted that even small changes in the number of rental homes available can significantly affect the market. Higher mortgage rates are not only affecting the home-buying market but also keeping more first-time buyers in rented accommodation for longer, reducing the supply of rental homes at a time when demand is typically rising with the start of the new academic year and other seasonal factors. The impact of these changes is most pronounced in areas where the availability of rental homes has dropped the most. However, affordability remains a key factor limiting how much rents can increase. In London, where mortgage rates have had a significant impact on homebuyers, the pressure on rents is particularly strong. Meanwhile, in more affordable rental markets, renters may have more capacity to absorb rent increases. Experts say that the combination of limited new investment by landlords and renters staying in their homes longer is expected to drive UK rents up by 4% to 5% by year-end. To address these challenges, increasing the number of rental homes through greater investment is seen as the most sustainable way to improve choice for renters and ensure long-term stability in rent levels. This would help balance supply and demand, potentially easing the upward pressure on rents and providing more options for those seeking rental housing.