Tenants in Brighton saw the sharpest increase in rental costs last year, data for This is Money shows.
Rental costs for tenants in the trendy seaside city jumped 15 per cent from £2,255 a month at the start of last year to to £2,602 by the end, the analysis shows.
Across Britain, the south coast of England saw the steepest rise in rental costs for tenants last year.
According to an analysis by Lomond, a network of lettings and sales agents, rents across the South East rose by an average of 10.5 per cent to £1,774 per month in 2025.
While Brighton saw the largest annual increase in average rental costs, other coastal hotspots showed signs of remaining popular with tenants.
In Southampton, Portsmouth and Worthing, demand for rental properties continued to outstrip supply last year, Lomond said.
The findings suggested Brighton remained popular with tenants due to its 'vibrant, city-like atmosphere' by the beach.
Lomond added: 'The affectionately known "London-by-the-Sea" continues to welcome high volumes of commuters to its rented accommodation, with the trend of hybrid working here to stay'.
Beyond the south coast of England, London saw average rents rise 1.5 per cent to a hefty £2,395 per month in 2025.
On average across Britain, average rental costs increased by 4.9 per cent to £1,602 per month last year.
Average rents in London were around 49 per cent higher than the national average. Both inner-city and suburban rental markets remained 'stable' last year, the findings added.
In the Midlands, rents for tenants grew by 5 per cent to £1,168 per months year-on-year on average, while in the north west of England average rents jumped 4 per cent to £1,243 a month.
Within the North West, furnished homes in city centres proved the most popular with tenants, Lomond said.
Across Scotland, average rents fell 1 per cent annually.
However, Scotland saw a 38 per cent increase in new landlord instructions in the period, according to the research.
In Scotland, many tenants were also drawn to 'move-in-ready' homes.
According to the analysis, buy-to-let mortgage activity fell sharply from 2023 to 2024, but steadied throughout 2025 with BTL mortgages comprising around 8 per cent to 9 per cent of all new mortgages.
Lomond said: 'This stabilisation suggests landlords remain engaged and active, but acting with a degree of caution and pragmatism as they adjust to economic conditions and policy changes'.
Elliott Trodd, managing director of Lomond’s south coast region, told This is Money: 'Brighton’s 15 per cent rental increase in just 12 months is a direct result of sustained demand colliding with restricted supply.
'We are seeing fewer landlords reinvesting in the market and continued inward migration, which keeps upward pressure on prices.
'For tenants, that means significantly higher monthly costs and much tougher competition for quality homes.
'For landlords who have remained in the private rental sector, this environment offers strong rental yields and dependable demand, making it an opportune moment for those considering reinvestment or portfolio expansion.'
Ed Phillips, group chief executive of Lomond, added: 'The UK’s rental sector showed real resilience in the final quarter of 2025. With the market framework now in place, the challenge shifts from anticipation to execution in both lettings and sales.
'While regional trends vary, demand remains strong, and landlords continue to invest strategically. With buy-to-let lending stabilising and rents rising at a manageable pace, the market enters 2026 on solid footing.'
According to findings published by SpareRoom this week, flatshare tenants priced out of rental hotspots in cities are increasingly turning to suburban commuter towns further away.
Esher, a Surrey commuter town around 30 minutes away by train from London Waterloo station, saw one of the sharpest rises in demand from flatshare tenants in the past year, SpareRoom said.
Annually, there has been a 32 per cent increase in demand for flatshare rental properties in Esher.
Amid high demand, there are 11.2 people searching per room available to rent in Esher, according to the research.
The Scottish town of Kilmarnock, around 40 minutes away from Glasgow, saw the biggest yearly spike in flatshare rental demand, FlatShare added.
The Renters Rights' Bill officially became law after receiving Royal Assent in October 2025.
The sweeping set of reforms mean landlords will no longer be able to carry out so-called 'no-fault' evictions and so cannot get rid of tenants without good reason.
But the law gives renters the right to end tenancies with two months' notice and enables them to better challenge poor conditions and unreasonable rent increases without fear of retaliatory eviction.
A major shake-up means fixed-term assured tenancies and assured shorthold tenancies will be abolished and replaced with rolling periodic tenancies, meaning renters will no longer be tied into long contracts.
