British rents are still rising at the fastest pace of the year while house price growth fades. Average private rents increased 3.8 percent year on year in September 2026, the same pace as in August and the joint strongest reading since December, the Office for National Statistics said on Wednesday. Annual house price inflation eased to 0.9 percent in August, from 1.2 percent in July, the weakest annual pace since March.
The two series pull monetary policy in opposite directions, and Wednesday’s inflation release shows which one is winning. Headline consumer inflation rose to 3.5 percent in September, driven by motor fuels, with producer prices accelerating; rent growth at 3.8 percent is the housing contribution that persists after fuel moves pass, because rents reset slowly and enter the index with a lag. A rent series holding at its high is evidence that the housing cost channel has not yet cooled to target consistent levels.
House prices, by contrast, are doing what higher mortgage rates are supposed to do without breaking. Growth of 0.9 percent is positive but below inflation, a real terms fall delivered gradually, and the weakest since March rather than a decline.
For the Bank of England’s November meeting, the release is a supporting exhibit rather than a deciding one: it confirms sticky housing services inflation on the morning the headline rate moved away from target, and it will be read alongside the borrowing figures, which showed debt interest at a record September high, in the run up to the budget.