Rental growth across the UK has slowed to its weakest pace in nearly four years, according to Zoopla’s latest Rental Market Report released on 11 June. The report reveals that rents for new tenancies rose by just 2.8% in the year to April—marking a sharp deceleration from the 6.4% recorded a year earlier and returning rent inflation to levels last seen in mid-2021.
Despite this apparent cooling, landlords remain under considerable strain. Demand for rental homes has eased by 16% compared to last year—driven by improved mortgage availability and declining net migration—but remains more than 60% above pre-pandemic levels. Meanwhile, supply continues to lag behind, sitting 20% below 2019 levels, even with a 17% year-on-year increase in available rental homes.
The national average rent for a new let now stands at £1,287 per calendar month—£35 more than a year ago. Although the pace of increases has slowed, affordability remains a pressing issue for many tenants, particularly in lower- and middle-income brackets where competition for homes remains fierce.
Northern Regions Lead the Slowdown as Urban Affordability Bites
The national figures mask growing regional disparities. Yorkshire and the Humber experienced one of the sharpest slowdowns, with rental inflation slipping to just 1.1%. Cities such as Leeds and Bradford saw contrasting trends, with Leeds reporting a decline of 1.5% and Bradford edging up by 1.4%. The North East also saw growth cool to 5.2%, down from 9.4% a year earlier.
In Scotland, where rent controls were lifted in April, rental inflation fell dramatically from 9.1% to 2.4%. In Dundee, average rents even declined by 2.1%. London’s rental market showed mixed signals, with prime postcodes like NW and WC experiencing modest drops of 0.2% and 0.6% respectively, though the citywide average remains high at £2,175 per month.
Interestingly, the sharpest increases are no longer found in city centres, but rather on the fringes. In towns like Wigan and Chester, rents have surged by 8.8% and 8.2%, respectively, as tenants seek more affordable alternatives to high-cost urban living.
Landlords Under Pressure from All Sides
While tenants may welcome the moderation in rental growth, landlords paint a more complex picture. Angharad Trueman, President of ARLA Propertymark, warned that behind the slowdown lies a raft of challenges for property owners.
“From the outside looking in, it may look as though landlords and their greed are at the heart of this problem. However, this is not the case,” Trueman said. “Many landlords face increased costs across the board—from new regulations and tax changes to rising mortgage rates.”
Trueman added that the current political environment is deterring investment in the sector, with some landlords opting to exit the market altogether. “The fundamental pressures remain unchanged,” she said. “We urgently need support and incentives to boost rental supply.”
Zoopla’s Executive Director of Research, Richard Donnell, echoed the sentiment, saying: “The rental market desperately needs increased investment across both the private and social sectors to ease the cost of living burden on renters.”
Despite Slower Growth, Tenants Pay Much More
Although growth has slowed, renters are still feeling the pinch. Since 2022, average rents have risen by 21%—five times faster than house prices—translating to an additional £2,650 in annual costs for the average tenant.
Landlords face a paradox: rising operational costs and regulatory burdens on one hand, and sustained tenant demand on the other. Those able to endure the current environment may still find long-term resilience in rental yields, but without significant policy change, the imbalance between supply and demand is expected to persist.
Looking Ahead: Policy Uncertainty and Investment Hesitancy
The market may be cooling, but the future remains uncertain. If interest rates rise again or regulations tighten further, landlord participation could dwindle—exacerbating the supply shortage and putting upward pressure on rents once more.
For now, tenants may see relief in slower rental increases. But for landlords navigating a complex landscape of rising costs and waning incentives, the future may prove less forgiving. As the housing debate continues, one thing is clear: without structural reform and renewed investment, the UK’s rental crisis is far from over.