£ 3, 140 £ 4, 224 + 6. 4%
MARKET OVERVIEW
RENTAL GROWTH CONTINUES TO MODERATE
The slowdown in the rental market which began in the later part of 2024 has continued into 2025. The supply demand balance is improving, but demand remains high by historic standards.
SLOWDOWN CONTINUES
The average rent across the UK reduced in January for the fourth consecutive month to £1,271. Annual rental growth is now 0.9%, the slowest rate since July 2020 (HomeLet). Although the pace of rental growth is slowing, rents are still expected to rise, albeit at a more moderate pace than in recent years. Rents for new lets are forecast to increase by 4% over 2025, driven by cheaper areas with headroom for further growth, while London and larger cities will lag behind due to growing affordability pressures (Hometrack). In the prime market, average rents have reached £4,224, up 6.4% year-on-year. Prime rental growth is strongest in the East of England, with an annual rise of 10.2%.
INCREASING SUPPLY
One of the key drivers of easing rental growth has been the increase in supply compared with lower levels in recent years. The number of available rental properties is now 13% higher than at the same time last year, improving the balance of supply and demand (Rightmove). The number of prospective tenants looking to move is also down by 16% compared to last year, however despite improvements, the supply demand imbalance remains. 6 out of 10 agents report that there are typically over 10 applicants for each listing on the rental market*. Average void periods remained steady at 21 days in December, though this marks a significant increase from just 11 days in July, when demand was at its peak intensity (Goodlord).
*Dataloft by PriceHubble Poll of Subscribers
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£1,299 £3,140 £4,224
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