UK Rental Market Settles

Rental conditions have settled into their most balanced position in around five years. Demand from tenants is estimated to be 24% lower year-on-year, reflecting reduced inward migration and improved mortgage access for first-time buyers who, in previous years, may have remained in the rental sector. Concurrently, available stock has increased by almost 20%, supported by renewed investment and a portion of sales listings being temporarily reintroduced to the lettings market.

An increase in available homes

This rise in supply is evident across much of the UK, though less pronounced in London, where demand remains structurally resilient.

With more choice available to tenants, the pace of rental growth has moderated. Average rents for new lets are now 2.4% higher year-on-year, the slowest rate since 2020 with certain regional markets, including Leeds and Bristol, showing modest adjustments as they recalibrate to new levels of supply and demand.

Looking ahead

The outlook is one of normalisation rather than retreat. Forecasts indicate that rents are likely to end 2025 around 2–3% higher, signalling a period of more sustainable growth following several years of exceptional momentum.

Key figures

• Average UK rent on new lets (July 2025, published Sept): £1,301
• Annual growth: 2.4% – the slowest in four years