Market Snapshot
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Average UK rent: £1,287 per month
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Annual growth: 2.8% year-on-year the slowest since July 2021
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Outlook: Rent increases of 3-4% forecast for 2025
What’s Driving the Slowdown?
1. Mortgage Rate Stability
Lower mortgage costs, especially for first-time buyers have reduced pressure on the top end of the rental market.
2. Slight Drop in Demand
Tenant enquiries are down 16%, though competition is still 60% above pre-COVID levels.
3. Supply Picking Up (Slowly)
Available rental stock is up 17% year-on-year, but still 20% below 2019 levels.
Regional Trends
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North East: Leading rent growth at +5.2%
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Yorkshire & Humber: Weakest growth at +1.1%
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London: Modest +1.5% increase; some inner boroughs saw declines
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Commuter towns: Strong performers like Wigan, Carlisle, and Chester, with +8–9% growth
Regional Average Rents:
| Region | Avg Rent (PCM) |
|---|---|
| North East | £950 – £1,000 |
| Yorkshire & Humber | £800 – £900 |
| London | £2,175 |
| Commuter Towns | £700 – £850 |
| South East | £1,350 – £1,450 |
| South West | £1,200 |
Key Insights for Landlords & Investors
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Margin pressure continues – Costs remain high, squeezing returns
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Consider smaller markets – Commuter areas offer better ROI opportunities
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Affordability matters – Middle- and lower-income tenants are stretched, making tenant retention and property quality more important than ever
Looking Ahead
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Rental growth expected to stay modest: 3–4% projected for 2025
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More first-time buyers may ease demand at the top end of the rental market
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Policy changes looming: Rental reform and energy efficiency (EPC) updates could tighten supply even further
