- Tenants are paying over £400 more per month than they were five years ago, on average
- However, despite the record high, the yearly pace of growth continues to slow down – this is good news for tenants as the market rebalances
- The current market has the best balance between supply and demand in five years, with more homes available and fewer people competing for them
Rents have climbed to yet another record high this quarter. Outside of London, average asking rents have reached £1,365 per month — up 1.2% on the first three months of the year. While that’s another new peak, the yearly growth rate has actually slowed to 3.9% – the lowest it’s been since 2020.
London rents have also ticked up by 0.5% to £2,712 per month, marking a 15th consecutive record. But again, the pace of increases is much gentler than the steep climbs we saw during the pandemic years.
Five years on from when Covid first hit, the numbers paint a stark picture of how much more expensive renting has become. New tenants are now paying over £400 more per month than they were in 2020 – that’s a 44% jump in rents compared to a 36% increase in average wages.
Most of this eye-watering growth happened during the frenetic pandemic years of 2021 and 2022, when the rental market went into overdrive. The good news is that since late 2023, the market has started to rebalance and find its feet again.
Our property expert Colleen Babcock says: “Despite another new record in average asking rents for tenants, the big picture is that yearly rent increases continue to slow, which is good news for tenants. Supply and demand is slowly rebalancing towards more normal levels, though we still have a way to go before we reach pre-2020 levels of available homes for tenants.”
Take a look at all the insights in our latest Rental Price Tracker.
What does this mean for tenants?
There are now 15% more rental homes available compared to this time last year, with the North East leading the charge with a 33% increase in available properties. At the same time, tenant demand has dropped by 10% compared to last year.
This improved balance means the average rental property now gets 11 enquiries, down from 16 last year. While that’s still higher than the 7 enquiries we saw back in 2019, it shows the rental market has cooled from its pandemic peak.
With more choice and less competition, tenants might find there is space to be more choosy, as well as having a bit more negotiating power. As Alex Caddy from Clarkes Estate and Letting Agency puts it: “The rental market has undergone a marked shift in 2025. After several years of sharp rent inflation post-pandemic, tenants hit a ceiling by late 2024, leading to widespread price slowdowns.”
There’s more good news when it comes to the choice of homes available for renters. Data from UK Finance shows buy-to-let lending is picking up, with a 17% increase in the total number of loans to property investors this year. Even better for tenants, new rental home purchases are up by 28%.
This renewed investment from landlords should help bring more rental homes to the market, which keeps rent growth in check and gives tenants more options.
Properties are taking longer to let
The cooling market is having some interesting knock-on effects. Rental homes are now taking an average of 25 days to find a tenant, up from 21 days last year and well above the 18 days we saw during the 2022 rental frenzy. Nearly a quarter (24%) of rental properties are also seeing price reductions during their marketing – the highest rate since 2017.
This shows that getting the price right from the start is becoming crucial, and landlords who are quick to adjust their expectations in line with market response can avoid lengthy void periods. With tenants having more choice, landlords are having to be more realistic about pricing.
Rental market trends differ by location
The rental market isn’t uniform across the country. Some areas are still seeing significant rent increases, while others are more balanced.
Ascot in Berkshire tops the rent growth charts with a +21% annual increase, pushing average rents to £2,259 per month. Farnham in Surrey isn’t far behind with a +19% rise to £1,870.
In the North West, Rochdale has seen rents jump +17% to £959, while Stockport is up +15% to £1,206. Glasgow has also experienced a marked increase (+12%), bringing rents to £1,219.
But it’s worth noting that these increases, while still significant, are generally lower than what we were seeing during the pandemic.
What could happen in the rental market next?
The rental market seems to be moving towards a more sustainable balance, though there are still some challenges. Student accommodation is facing particular pressures – a reduced university intake for 2025 is leaving many houses of multiple occupation unlet for September.
As a result, some student landlords are adding their properties to an already well-supplied market. While demand remains strong for quality one- and two-bedroom homes, larger properties are moving more slowly. Some are experiencing longer void periods as tenants benefit from increased choice.
At the same time, the upcoming Renters’ Rights Bill changes are prompting some landlords to review their approach. There’s also increased focus on ensuring tenancy lengths align with both landlords’ plans and tenants’ expectations.
Despite these changes, the overall number of landlords leaving the market remains in line with recent years.
Tips for renters in the current market
While the rental market is much more settled than in recent years, competition between tenants is still strong.
- Be prepared but not panicked: Set up property alerts to stay informed, but remember you now have a bit more time to make decisions than during the pandemic rush.
- Research thoroughly: With more properties available, take time to compare options. You can start your search for a rental home here, as well as drawing a search area if you know they location you’d like to live in.
- Have your paperwork ready: References, proof of income and ID should all be easily accessible.
- Consider timing: With properties taking longer to let and more price reductions happening, there might be opportunities if you’re flexible about move-in dates.
- Consider broadening your search area: With 15% more properties available, consider widening your search area – you might find your budget goes further in areas you hadn’t previously considered.
Take a look at our tips for boosting your chances of getting a viewing
Header image provided courtesy of Reside Bath Limited, Bath
