Key Highlights

• 24% demand drop: Demand for rentals is down compared to last year, marking the softest conditions in five years.
• 19% supply rise: The number of homes for rent has grown nearly a fifth, giving tenants more choice and easing pressure on rents.
• £1,301 average rent: Up 2.4% annually, the slowest growth since 2020.

What’s Happening Across the UK?

• Supply expanding: Most regions are seeing more rental properties, giving renters greater choice and reducing upward pressure on rents.
• Northern growth: Northern regions and Scotland have particularly strong supply and attractive yields, drawing more landlord investment.
• Tenant flexibility: Easier mortgage access and a wider rental stock mean tenants can take their time finding the right property, with an average of 16 days to let.
• Local adjustments: Smaller rental falls are being seen in some cities as supply and demand rebalance across the market.

Supply & Investment Trends

• Landlord returns rising: Average rental yields are 6% nationally, reaching over 7.5% in parts of Scotland and the North East.
• Buy-to-let recovery: New landlord investment is growing, adding more properties to the market and improving tenant choice.
• Market balancing: Unsold homes for sale may shift into the rental market, supporting supply further.
• Regional differences: While some high-cost areas face challenges, most regions are seeing healthy growth in rental stock and investment opportunities.

Looking Ahead

• Slower rent growth: With rising supply and weaker demand, rents are expected to grow 2–3% through 2025, below recent years’ levels.
• Affordability pressures: Many renters remain on below-average incomes, and housing benefits are not keeping pace, limiting rental inflation.
• Opportunities for landlords: Regions with high yields and affordable areas remain attractive for investment, while tenants benefit from more options and competitive pricing.

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