The pace of rent increases has slowed sharply across the UK, offering some relief to tenants after years of surging costs, according to the latest figures from property website Zoopla.
Average rents are now 2.4 per cent higher than a year ago – the lowest annual growth rate in four years and less than half the pace recorded 12 months earlier. The typical monthly rent stands at £1,300, up £30 from last year.
The moderation marks a turning point for renters who have faced steep increases since 2020. Average rents have risen by nearly £80 per week over the past five years, adding £4,100 to annual housing costs. That burden has pushed many households to their limits, creating affordability pressures that have slowed further growth.
More Homes on the Market
Conditions are shifting in tenants’ favour as supply rebounds. The number of homes available to rent has jumped by 19 per cent in the past year, while demand has fallen 24 per cent. Letting agents are reporting fewer enquiries, with properties now staying on the market for an average of 16 days – giving renters more time and choice than in recent years.
Regional trends highlight the shift. Supply is up sharply in the South West (36 per cent) and East Midlands (31 per cent), with some homeowners opting to let out properties they struggled to sell. By contrast, London’s rental market remains tight, with only a modest rise in supply. High barriers for buy-to-let investors and a large share of landlords still exiting the market continue to constrain availability in the capital.
Affordability Bites
Despite the easing of pressure, affordability remains a major challenge. Many renters are on below-average incomes, and nearly a third rely on housing benefit, which has not kept pace with rental growth. The rapid increases of recent years have left their mark, with rents now consuming a greater share of household budgets.
At a local level, some cities are seeing outright declines: Bristol and Leeds recorded annual rent falls of 0.5 and 0.6 per cent respectively. Regional growth is muted across London, Scotland and Yorkshire and Humberside, all recording rises of under 2 per cent, while the North East remains an outlier with growth of 4.6 per cent.
Impact of Mortgage Market Shifts
Falling demand for rentals is partly driven by improved access to mortgages. Tighter visa rules have cut migration in half since 2024, while changes to mortgage affordability rules this year boosted first-time buyers’ borrowing power by 20 per cent. The result has been a 30 per cent jump in first-time buyer mortgages, freeing up additional rental properties as new homeowners move on.
Outlook for 2025
Zoopla expects rental growth to remain subdued, forecasting a three per cent increase over the remainder of 2025, taking the average rent to £1,320 a month.
“Rental market conditions are starting to normalise which will be very welcome news to renters,” said Richard Donnell, Zoopla’s Executive Director. “Lower migration and better mortgage availability for first-time buyers are easing competition for rented homes. The affordability of renting remains a key constraint on the pace of future rental inflation.”
After years of relentless rises, the balance of power in the rental market may finally be beginning to shift back towards tenants.