May Lettings Market Update

12th May 2025

As we progress through spring, the UK rental market shows notable shifts in both supply and demand dynamics. Here’s an overview of the current landscape:

The average UK monthly rent reached £1,332 in March 2025, marking a 7.7% increase over the past year. This growth rate has decelerated from the 9.1% peak of March 2024, indicating a moderation in rental inflation.

Regionally, the North East experienced the highest annual rent inflation at 9.4%, while Yorkshire saw the lowest at 4.6%.​

Supply and Demand: A Narrowing Gap

Recent data indicates a gradual balancing of the rental market:​

• Supply Increase: The number of homes available for rent has risen by 11% compared to the previous year.​

• Demand Decrease: Rental demand has decreased by 17% over the same period.​

Despite these shifts, competition remains robust, with an average of 12 renters vying for each available property.​

Affordability Pressures Persist

Affordability continues to be a significant concern for renters. On average, tenants are allocating 31% of their gross income to rent, surpassing the five-year average of 27.1%.

This financial strain is leading many tenants to remain in their current accommodations longer, contributing to reduced turnover rates.

Outlook: Modest Growth Ahead

Looking forward, rental growth is expected to continue at a more moderate pace. Forecasts suggest a 3–4% increase in UK rents throughout 2025, reflecting a market adjusting to affordability constraints and evolving supply-demand dynamics.​

In Summary

The UK rental market is transitioning towards greater equilibrium, with easing rent growth and a narrowing supply-demand gap. However, affordability challenges remain at the forefront, influencing tenant behaviour and market dynamics.​

For landlords and property professionals, staying informed and adaptable is key. Monitoring regional trends and understanding tenant needs will be crucial in navigating the evolving landscape.

Sources:

Office for National Statistics

Zoopla

Fine & Country