Rents rise at slowest rate for four years, Zoopla warns
Skyrocketing rents in the UK have given way to a steadier increase as the supply of homes rises and tenant demand falls, according to new figures.
Average rents are 2.4 per cent higher than a year ago, the lowest annual rate in four years and less than half of that recorded 12 months ago, Zoopla has said.
Richard Donnell, executive director at Zoopla, said conditions are “starting to normalise”, adding that lower migration and better mortgage availability for first time buyers has “eas[ed] the scale of the competition for rented homes”.
“There is also more choice for renters with more homes for rent as landlords start to buy homes once again and some owners who can’t find a buyer listing their homes for rent,” Donnell said.
But rental demand remains above pre-pandemic levels due to the unaffordability of home ownership, which is trapping people in private renting in many areas.
Rental growth is on track to be three per cent over 2025.
Peter Maskell, managing director of Brock Taylor, said: “For landlords, success now hinges on being realistic with pricing and ensuring properties are both well-presented and well-located, as these are the homes that continue to attract strong demand even as the market steadies.”
London market still yet to ease
London rents rose by an around 40 per cent between 2021 and 2024 as huge demand after a series of national lockdowns was compounded by a rise in interest rates due to the Russian invasion of Ukraine.
“While the situation is improving, the London market remains tighter than in other parts of the UK,” Zoopla said.
In August, government data showed that the local authorities in the United Kingdom with the least “affordable” rents were all in London.
The number of rental homes in the capital has only increased slightly compared to other parts of the country, as landlords struggle with high deposits and low yields.
In fact, the capital’s most exclusive boroughs are among the UK’s worst places to invest in 2025 as yields continue to dry up.
London has the largest share of landlords still looking to sell homes, at 31 per cent of all homes for sale.
Property analysts have said that a potential extra tax on landlords’ rental income, as well as the upcoming renter’s rights bill, will lead to even more landlords selling up in the capital.