March Rental Market Update | Is the Market Finally Shifting?
So, what’s really happening in the rental market right now? Here’s your full breakdown of the key trends in March 2025.
The UK rental market is showing signs of change. While rents are still rising, demand is beginning to ease—but competition remains fierce. With an average of 12 tenants chasing every available property, landlords are still in a strong position.
So, what’s really happening in the rental market right now? Here’s your full breakdown of the key trends in March 2025.
UK & Southeast Rent Trends – What’s Changing?
The latest figures show that rental prices continue to climb, but the rate of growth is finally slowing:
- UK average rent: £1,284 per month (up 3% year-on-year)
- Southeast average rent: £1,380 per month (up 3.8% year-on-year)
This marks the slowest increase in over three years—a stark contrast to the 7.4% jump in 2024. However, with demand dropping by 177%, competition remains high, and tenants are still struggling to secure homes.
Rental Yields & Where Landlords Are Seeing the Best Returns
Despite shifting demand, rental yields remain strong, making property investment in the UK a solid option:
- Average rental yield in England: 7.4% (up 6% from last year)
- Southeast rental yield: 4.26%
While yields in the Southeast sit slightly below the national average, landlords in key commuter areas continue to benefit from consistent tenant demand.
The Most In-Demand Property Type Right Now
If you’re considering a buy-to-let investment, the data suggests that one property type stands out:
🏡 Two-bedroom terraced houses are the most sought-after rental homes.
Why?
✅ Affordable – A budget-friendly choice for renters.
✅ Spacious – Ideal for professionals and small families.
✅ High demand – These properties are being snapped up quickly.
With rental supply up 11% compared to last year, more homes are becoming available. But with 12 renters competing for each property, landlords are still in a strong position.
Affordability Concerns: Are Rents Rising Too Fast?
The biggest challenge facing renters right now is affordability. Over the past four years:
- Rents have risen by 27%
- Wages have only increased by 19%
This means the average tenant is paying an extra £3,240 per year compared to 2021. With affordability pressures mounting, could we see a shift in rental demand?
What’s Next? Rent Predictions & Outlook for 2025
Looking ahead, property experts predict that rents will rise by another 3-4% in 2025. However, the key factor shaping the market will be rental supply, both in the private and social housing sectors.
With ongoing discussions about renters’ reforms, we could see further changes that impact both landlords and tenants.
If you need any advice or help with anything lettings, then get in contact with me and I will be more than happy to help.
For more insights, watch The Investor’s Corner Podcast every other Friday, where we break down the latest market trends and investment opportunities.