Buy-to-let landlords remain active in the UK rental market, which ended 2025 showing steady growth despite affordability pressures and cooling demand in some regions.
According to Lomond’s Quarterly Insights Report for Winter 2025/26, the national average rent rose to £1,602 per calendar month (PCM), up 4.9% compared with 2024.
Overall, the South Coast of England has delivered the strongest rental growth in the UK, with rents rising by a staggering 10.5% to £1,774pcm on average. Along with Brighton, demand across Southampton, Portsmouth and Worthing continued to outstrip supply, particularly for well-maintained two- and three-bedroom homes, pushing rental prices up by double digit percentages.
London recorded a 1.5% increase in average rents to £2,395pcm in 2025 – which is still 49% higher than the UK average. Despite sector challenges and regulatory changes, following the Renters’ Rights Act and Budget announcements, both the suburban and inner-city markets of London remained stable, demonstrating ongoing confidence from landlords and tenants alike.
The Midlands and North West regions both recorded stable, sustainable increases. In the Midlands, rents grew by 5% to £1,168pcm on average and the North West saw rents rise by 4% year-on-year to £1,243pcm, with furnished homes in the city centre being most popular with tenants. As the cost-of-living crisis continues to affect the nation, tenant’s decision making is increasingly centred on energy efficiency, running costs and property condition.
Despite a 1% dip in average rents to £1,348, Scotland experienced a 38% rise in new landlord instructions, according to Lomond, signalling continued appetite for move-in-ready homes and rising landlord confidence.
Buy-to-let mortgage activity fell sharply from 2023 to 2024 but steadied throughout 2025 with BTL mortgages comprising around 8–9% of all new mortgages. This stabilisation suggests landlords remain engaged and active but acting with a degree of caution and pragmatism as they adjust to economic conditions and policy changes.
Ed Phillips, Group Chief Executive of Lomond, said: “The UK’s rental sector showed real resilience in the final quarter of 2025. With the market framework now in place, the challenge shifts from anticipation to execution in both lettings and sales.
“While regional trends vary, demand remains strong, and landlords continue to invest strategically. With buy-to-let lending stabilising and rents rising at a manageable pace, the market enters 2026 on solid footing.”
Properties taking longer to let as affordability remains stretched
