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The number of tenants registering in lettings branches across Great Britain was down 17% on the same time last year and is now running 28% below 2019 levels.
This decline in tenant registrations is widespread, with 63% of branches reporting fewer tenants registering in May 2025 compared to May 2024. This marks the twelfth consecutive month in which tenant demand was lower than the same time last year.
Year-on-year change in new tenant registrations
Source: Hamptons
For would-be first-time buyers with small deposits, falling mortgage rates have pushed the monthly cost of purchasing below the cost of renting. Anyone with a deposit of at least 10% is now likely to find themselves better off buying than renting.
This shift has hit tenant demand in more affluent areas, in particular, where tenants are most likely to buy. Tenant demand has fallen 50% more in the most affluent areas than in the least affluent areas.
So far in 2025, there have been an average of 1.5 tenants registering to find somewhere to rent for each prospective first-time buyer. This ratio has nearly halved since mortgage rates peaked in 2022 and 2023, driven by both falling tenant numbers and increased buyer demand from first-time purchasers.
Back in 2017, there were an average of 5.9 tenants registering in a branch looking for somewhere to rent for each would-be first-time buyer looking for somewhere to buy. However, this ratio has been steadily shrinking, which coincides with a rising share of first-time buyers.
For the first time in at least the last decade, both London and Scotland have seen more first-time buyers looking to buy than there are tenants looking to rent.
In the capital, first-time buyers have accounted for 50.3% of new buyer registrations this year, with numbers up 2% year-on-year, despite a fall in demand from other buyers.
Ratio of new tenant to first-time buyer registrations (2025)
Source: Hamptons
At the end of May, there were 5% more homes on the rental market than at the end of May 2024. The number of homes available to rent has increased annually in every month since August 2022, despite a decline in new buy-to-let purchases. The increase in supply reflects how homes are taking a little longer to let, due to weaker demand. However, in recent months, the size of increases has dropped back to low single digits.
This slight increase in supply, combined with weaker demand, has reduced rental growth. The average rent on a newly let property in Great Britain rose 1.5% over the last 12 months to £1,366 per month (chart 4, table 1). This means rents are growing at a similar pace to 2013, when they rose by an average of 1.6%. In May 2024, average rents increased by 5.1% annually, indicating that the pace of growth has declined by nearly two-thirds over the last year.
Annual rental growth (Great Britain)
Source: Hamptons
For the twentieth consecutive month, rental growth on renewals (ie when a tenant renews an existing contract) rose faster than new lets (when a new tenant moves into a property). Tenants staying put saw rents rise by an average of 3.7% to £1,267 per month in May. This leaves the average tenant renewing a contract paying £99 per month less than a tenant moving into a new home.
For tenants moving into a new property, rental growth remains highest in the North and the Midlands. Meanwhile, London rents fell 0.5% on the same time last year, reducing the headline national rate of rental growth by 1.0% (table 1). Rents in the capital now stand below where they were in June 2023.
Rental growth in May 2025
| Region | New lets | Renewals | ||
| Average monthly rent | YoY % | Average monthly rent | YoY % | |
| Greater London | £2,283 | -0.5% | £2,156 | 0.6% |
| Inner London | £2,668 | -1.6% | £2,630 | -1.2% |
| Outer London | £1,999 | 0.7% | £1,807 | 2.7% |
| South | £1,348 | 2.5% | £1,236 | 4.3% |
| East of England | £1,255 | 3.3% | £1,201 | 5.8% |
| South East | £1,475 | 1.8% | £1,340 | 3.0% |
| South West | £1,247 | 2.9% | £1,111 | 4.9% |
| Midlands | £1,037 | 3.1% | £943 | 6.7% |
| East Midlands | £995 | 3.4% | £897 | 5.6% |
| West Midlands | £1,074 | 2.9% | £983 | 7.6% |
| North | £949 | 2.7% | £882 | 6.9% |
| North East | £828 | 3.5% | £768 | 9.1% |
| North West | £1,022 | 4.1% | £905 | 7.8% |
| Yorkshire & The Humber | £906 | 0.4% | £903 | 5.0% |
| Wales | £870 | -0.2% | £803 | 2.8% |
| Scotland | £1,017 | 1.1% | £883 | 5.6% |
| Great Britain | £1,366 | 1.5% | £1,267 | 3.7% |
| Great Britain (Exc London) | £1,131 | 2.5% | £1,039 | 5.3% |
Source: Hamptons
Aneisha Beveridge, head of research at Hamptons, said: “In a similar trend to the years following the last economic downturn, falling interest rates have reduced the pace of rental growth. Landlords rolling off short-term fixed-rate mortgages are now seeing their monthly payments fall, reducing the need to pass on further costs to tenants.
“At the same time, lower mortgage rates are changing the arithmetic for tenants who are thinking about buying. While rates remain high relative to pre-Covid times, three years of above-inflation rental growth mean that for most, buying remains cheaper than renting. This has boosted first-time buyer numbers and reduced demand in the rental sector.
“It has taken the best part of two years for the pace of rental growth to fall from double digits down to 1.5%. This means that rents are now rising at a rate that’s close to their long-term average, and suggests that the era of rapid rental growth is behind us for now.
“That said, rental growth is unlikely to cool much further. While falling interest rates should take the sting out of rental growth over the next few years, landlords will likely continue to price in political risk. Landlords are increasingly getting their heads around what the Renters’ Rights Bill will mean for them, but the way it plays out for landlords in reality will shape future investor appetite.”
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